The Consumer Price Index (CPI, 2005=100) slowed for the eighth consecutive month in Apr ’09 to 3% YoY (Maybank IB estimate: 3.3% YoY; Consensus estimate: 3.2% YoY), compared with 3.5% YoY in Mar 09 and the peak of 8.5% YoY in Jul-Aug ’08. MoM, the inflation rate fell by 0.2%, the seventh sequential drop in the past eight months. Year-to-date inflation rate is 3.5%. Slowing mainly on Food and Non Alcoholic Beverages (FNAB) “disinflation” and Transport “deflation”. FNAB prices eased for the seventh straight month while Transport costs fell for the fifth month in a row. There were no major movements or changes in the price trends of other goods and services. Consequently, our measure of CPI ex-FNAB and Transport was little changed at 2% YoY last month (Mar 09: +2.1% YoY).

1. Equity Research
PP11072/03/2010 (023549)
Economics 21 May 2009
CPI, Apr 09 Further easing in inflation rate
The Consumer Price Index (CPI, 2005=100) slowed for the eighth
Suhaimi Ilias consecutive month in Apr ’09 to 3% YoY (Maybank IB estimate:
Suhaimi_ilias@maybank-ib.com 3.3% YoY; Consensus estimate: 3.2% YoY), compared with 3.5% YoY
(603) 2297 8682 in Mar 09 and the peak of 8.5% YoY in Jul-Aug ’08. MoM, the inflation
rate fell by 0.2%, the seventh sequential drop in the past eight months.
Ramesh Lankanathan Year-to-date inflation rate is 3.5%.
ramesh@maybank-ib.com Slowing mainly on Food and Non Alcoholic Beverages (FNAB)
(603) 2297 8685 “disinflation” and Transport “deflation”. FNAB prices eased for the
seventh straight month while Transport costs fell for the fifth month in a
row. There were no major movements or changes in the price trends of
other goods and services. Consequently, our measure of CPI ex-FNAB
and Transport was little changed at 2% YoY last month (Mar 09: +2.1%
YoY).
Malaysia: Consumer Price Index (CPI, 2005=100) (% YoY)
Jan-09 Feb-09 Mar-09 Apr-09 YTD 2008
09
Total 3.9 3.7 3.5 3.0 3.5 5.4
Food and Non-Alcoholic
9.9 9.3 8.8 7.5 8.9 8.8
Beverages
Alcoholic Beverages
8.3 8.2 8.3 8.3 8.3 7.3
and Tobacco
Clothing and Footwear (0.8) (0.6) (0.6) (0.6) (0.7) (0.5)
Housing, Water,
Electricity, Gas and 1.7 1.5 1.4 1.4 1.5 1.6
Other Fuels
Furniture, Household
Equipment and Routine
4.8 4.7 4.5 4.4 4.6 3.0
Household
Maintenance
Health 2.5 2.6 2.6 2.4 2.6 2.2
Transport (2.2) (2.2) (2.1) (2.3) (2.1) 8.8
Communication (0.5) (0.5) (0.6) (0.5) (0.6) (0.6)
Recreation Services
1.0 0.9 1.0 0.9 1.0 1.8
and Culture
Education 2.9 2.4 2.5 2.5 2.6 2.3
Restaurants & Hotels 4.7 4.3 4.2 3.9 4.3 6.6
Miscellaneous Goods &
2.7 3.7 3.6 3.6 3.4 3.3
Services
Source: Dept. of Statistics
“Technical deflation” underway as we expect % YoY monthly
inflation rate to go into negative territory between mid-year up to late-
3Q09/early-4Q09 on lower fuel prices as well as taking into account the
falling producer price index (PPI) since Nov ‘08.
We maintain our 2009 and 2010 inflation rate forecasts of 1% and
1.5% respectively, which is a marked deceleration from 5.4% in 2008
amid the absence of “demand-pull” and “cost-push” factors in view of
the economic downturn and lower commodity prices.

2. CPI, Apr 09
Malaysia: Consumer Price Index (CPI, % YoY) Malaysia: Consumer Price Index & Producer Price Index
(% YoY)
14 25 9 15
8
12 20
7 10
10 PPI (RHS)
15 6
Transport (RHS) 5
8 5
10
6 4
FNAB 0
5 3
4
2
CPI 0 (5)
2
1 CPI (LHS)
Utilities, Housing & Other Fuels
0 (5) 0 (10)
Sep-02
Sep-03
Sep-04
Sep-05
Sep-06
Sep-07
Sep-08
Jan-02
Jan-03
Jan-04
Jan-05
Jan-06
Jan-07
Jan-08
Jan-09
May-02
May-03
May-04
May-05
May-06
May-07
May-08
Nov-00
Nov-05
Jan-00
Jun-00
Jan-05
Jun-05
Jul-02
Jul-07
May-03
May-08
Feb-02
Mar-04
Feb-07
Mar-09
Apr-01
Oct-03
Apr-06
Oct-08
Sep-01
Dec-02
Aug-04
Sep-06
Dec-07
(1)
(2) (15)
Sources: Dept. of Statistics Sources: Dept. of Statistics
The latest inflation number is not expected to have any bearing on
the central bank’s Monetary Policy Committee meeting on 26 May
amid the shift in the central bank’s Monetary Policy Statement and the
Governor’s remarks recently to a more “upbeat” tone. This signals the
pressures for further OPR rate cuts are significantly reduced. We
expect the OPR to stay at 2% for the rest of this year and next year.
Schedule of BNM’s MPC Meetings in 2009
Dates Outcome
21 Jan ’09 (Wednesday) 75bps reduction in OPR to 2.5%
24 Feb ’09 (Tuesday) 50bps reduction in OPR to 2%
29 Apr ’09 (Wednesday) OPR maintained at 2%
26 May ’09 (Tuesday) To be announced (TBA)
29 Jul ’09 (Wednesday) TBA
25 Aug ’09 (Tuesday) TBA
28 Oct ’09 (Wednesday) TBA
24 Nov ’09 (Tuesday) TBA
Source: BNM
21 May 2009 Page 2 of 4

3. CPI, Apr 09
Central Bank’s Sound Bites…
Source Remarks about Economic Conditions & Outlook
MPS, 24 Nov ‘08 …the outlook for global growth has deteriorated further.
Several major advanced economies are now in recession amid
severe stress in their respective financial systems. The sharp
slowdown in global demand, the significant fall in commodity
prices and the substantial decline in equity prices have exerted
greater downward pressure on the growth prospects of
regional economies.
The adverse global developments have already affected the
Malaysian economy, as evidenced by the slowdown in export
performance and lower equity prices. While domestic demand
remains resilient, there are indications of slower private sector
activity amid some softening in the labour market conditions
and a more challenging business environment.
MPS, 21 Jan ‘09 The international economic and financial conditions have
deteriorated much more significantly in the recent period. The
major industrial economies are now experiencing a recession
and this has significantly increased the risks to global growth.
The sharper deterioration of the global economy is expected to
have a greater impact on the Malaysian economy. The large
decline in external demand has already led to a contraction in
exports and a moderation in the pace of private investment
activity. In addition, these developments have also affected
labour market conditions.
MPS, 24 Feb ‘09 The international economic and financial environment has
deteriorated sharply in the recent quarter. The major advanced
economies are experiencing a deepening economic
contraction, while the regional economies are experiencing a
rapid slowdown. The impact of the rapid decline in global
demand on trade, production and investment activities in the
Asian region has intensified…The downside risks to the global
economic outlook have increased significantly.
The Malaysian economy has been adversely impacted by
these global developments... The domestic economic
conditions are expected to continue to remain challenging in
the coming quarters with the continued deterioration in the
global economy… this has raised the risk of an economic
contraction in 2009....
Governor, 27 Apr ’09 OPR cuts have been “front-loaded”. Therefore, if we see the
improvement expected to take place in the second half of the
year, and certainly further improvement going into next year,
we should have done most of what we need to do now. Both
global and local economies are expected to improve by the
second half of the year.
MPS, 29 Apr 2009 The global economic conditions deteriorated further in the first
quarter of 2009. Major advanced economies are still
experiencing a deepening economic contraction. Regional
economies have also recorded a sharp economic slowdown in
the first quarter. While the near-term economic outlook will
continue to remain weak, the implementation of large stimulus
measures by several countries has increased the prospects for
economic conditions to improve in the second half of the year.
The (Malaysian) economy, therefore, is expected to record a
marked contraction in the first quarter of 2009. These
conditions are expected to prevail until the second quarter of
the year. Nevertheless, some signs of moderation in the pace
of decline in economic activity have emerged. The current
assessment is that the domestic economy is expected to
improve in the second half of 2009, supported by stabilisation
in global economic conditions and the larger impetus from the
implementation of the fiscal stimulus measures.
Going forward, the implementation of the fiscal stimulus
measures, and the accommodative monetary environment
following the previous reductions in the OPR, will provide
support to domestic economic activity.
Sources: BNM, Media Reports
21 May 2009 Page 3 of 4

4. CPI, Apr 09
Definition of Ratings
Maybank Investment Bank Research uses the following rating system:
BUY Total return is expected to be above 10% in the next 12 months
HOLD Total return is expected to be between -5% to 10% in the next 12 months
SELL Total return is expected to be below -5% in the next 12 months
Applicability of Ratings
The respective analyst maintains a coverage universe of stocks, the list of which may be adjusted according to needs. Investment ratings are
only applicable to the stocks which form part of the coverage universe. Reports on companies which are not part of the coverage do not
carry investment ratings as we do not actively follow developments in these companies.
Some common terms abbreviated in this report (where they appear):
Adex = Advertising Expenditure FCF = Free Cashflow PE = Price Earnings
BV = Book Value FV = Fair Value PEG = PE Ratio To Growth
CAGR = Compounded Annual Growth Rate FY = Financial Year PER = PE Ratio
Capex = Capital Expenditure FYE = Financial Year End QoQ = Quarter-On-Quarter
CY = Calendar Year MoM = Month-On-Month ROA = Return On Asset
DCF = Discounted Cashflow NAV = Net Asset Value ROE = Return On Equity
DPS = Dividend Per Share NTA = Net Tangible Asset ROSF = Return On Shareholders’ Funds
EBIT = Earnings Before Interest And Tax P = Price WACC = Weighted Average Cost Of Capital
EBITDA = EBIT, Depreciation And Amortisation P.A. = Per Annum YoY = Year-On-Year
EPS = Earnings Per Share PAT = Profit After Tax YTD = Year-To-Date
EV = Enterprise Value PBT = Profit Before Tax
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21 May 2009 Page 4 of 4