Most Asean countries exports also rose better-than-expected in Nov

Thailand’s custom-cleared exports rebounded to a strong 10.2% yoy growth in November (-4.2% in October), significantly higher than market expectations of a 2.1% increase. The rebound was across the board, with exports of principle manufacturing products, accounting for 78.7% of total exports, recovering strongly from a 2.7% yoy decline in October to +9.8% growth in November, as well as reflected in agricultural products (+20.2% vs -5.7% in October), agro industrial products (+3.5% vs -7.5% in October), mineral products and fuel (+9.4% vs -22.1% in October). Looking across Asean countries’ exports, stronger export growth in November that significantly exceeded market expectations were also recorded in Indonesia (21.3% vs 5.1% in October) and Singapore (11.5% yoy vs -12% in October), which we believe was attributed to stronger demand from China and the US.

This was also partly in tandem with a rebound in China’s exports, which recorded positive growth for the first time in eight months by 0.1% in November, attributed to higher shipments to the US, while improvement in China’s domestic demand also resulted in a better-than-expected increase of 6.7% in the country’s imports, reflecting the importance of China’s market to Asean trade performance. Nevertheless, we believe the betterthan-expected performance of export growth in November may be a temporary phenomenon, possibly reflecting companies opting to front-load their purchases from China before any changes in US trade policy.

Separately, in tandem with strong non-oil domestic export (NODX) growth, Singapore’s industrial production (IPI) also grew strongly by 11.9% yoy in November, the strongest pace since March 2014. Excluding biomedical manufacturing (+34.8% yoy in November), IPI rebounded to rise by 6.4% yoy (-1.3% in October), supported by refined petroleum products (22%), computer, electronic & optical products (22.2%), and motor vehicle (12.8%). Despite the increase in November’s IPI, the latest 2016/2017 annual National Business Survey by the Singapore Business Federation, showed that about 48% of more than 1,100 companies surveyed still expect the country’s economic conditions to worsen in 2017, citing operating costs (68%) and manpower issues (66%) remain the biggest challenges.

Meanwhile, Singapore ended its 24 months of negative inflation streaks, by registering a flat growth in November (-0.1% yoy in October), in line with market expectations. Similarly, core inflation rose more-than-expected to 1.3% yoy, the highest since February 2015.

Source: Affin Hwang Research - 30 Dec 2016