● Exports fell in October for the twelve straight months, declining by 6.1% YoY (Sep: -5.7%; consensus: -8.4%) on weak shipment in exports of oil & gas and non-oil & gas products.

- MoM: exports rebounded by 5.9% (Sep: -1.3%) to USD14.9b.

- YTD: exports fell by 7.8% YoY (Jan-Oct 2018: +11.6%), albeit lesser than the Jan-Sep period (-8.0%) but remained in our forecast range of 5.0% to 10.0% YoY for 2019 (2018: +6.7%)

- Non-oil & gas products: fell at a slower rate of 2.5% YoY (Sep: -2.7%) supported by sustained but slower exports of agriculture (7.5%; Sep: 12.2%), while manufacturing, and mining & others continued to fall at 2.5% and 3.7% YoY respectively (Sep: -0.4% and -14.8% respectively).

- Oil & gas-based products: fell sharply by 40.1% YoY (Sep: -37.1%) weighed by exports of mining (-45.9%; Sep: - 47.3%).

- Manufacturing related oil and gas exports moderated to 7.7% YoY (Sep: +23.9%), slowest in five months.

● Imports fell sharply by 16.4% YoY (Sep: -2.4%; consensus: -16.0%), dragged by a sharp fall in oil & gas products (- 39.8% YoY) which is in line with the government’s effort to limit the current account deficit.

- By category, imports of raw materials declined sharply (-18.8%; Sep: -5.9%), followed by capital goods (-11.3%; Sep: +8.9%), and consumer goods (-4.4%; Sep: 6.2%).

- MoM: imports expanded to 3.6% (Sep: +0.7%) to USD14.8b.

● Overall, total trade extended its fall for the eleventh straight month at -11.5% YoY (Sep: -4.1%), while trade balance swings to a surplus of USD160.1m (Sep: -USD112.4m) beating the consensus estimate of a USD280.0m trade deficit.

● Forecast maintained with exports remains subdued in the near term (2019: -5.0% to -10.0%).

- Mainly due to the impact of the prolonged US-China trade feud and the growth slowdown in key export markets, though commodity prices seem to be stable and supporting the country’s exports in the near term.

Source: Kenanga Research - 18 Nov 2019