• Leading index ticks up in Mar.  The Leading Index (LI) snapped a 5 month decline to increase marginally by 0.2% in March (-0.7% in February), signalling that the economic downturn will stabilise in 2H09 and should gradually recover in 2010.
• Coincident index contracts further while lagging index rose.  The Coincident index (CI) declined by 10.0% in March (-8.6% in February), signalling the marked contraction in economic activities currently.  However, the Lagging index (LGI) rose further by 11.1% in March (12.4% in February).
• The worst is behind us.  Following a sharp contraction of 6.2% in 1Q09, we believe that the worst in terms of the GDP fallout is behind us.  The small uptick in the leading index reinforces our prognosis that the pace of declines will be shallower, and the downturn will botom out in 3Q before recovering to a positive growth of 1.3% in 4Q.  We maintain our full year estimate for a contraction of 3.0% for 2009 and a rebound to +3.5% in 2010.
• Early signs of stabilising are
  (i)  Malaysia's leading index turned around in March 09 following five straight months of negative growth;
  (ii) Manufacturers reporting some gradual pick up in orders and replenishment of stocks;
  (iii) The easing pace of retrenchment (-2,871 person in April vs 3,489 persons/month during the period July 08 - March 09); and
  (iv) Sustained household loans demand (+14.1% yoy in April vs +21.5% in March), suggesting a recovery in consumer sentiments.

Please find attached the article by Mr Lee Heng Guie _^here

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