● Exports fell in November for the thirteenth straight months, down 5.7% YoY, beating market expectation (Consensus: -2.8%; Oct: -6.1%) on the back of a slowing global and regional trade activities

- MoM: exports growth reverted into negative territory, contracting 6.2% (Oct: +5.9%) to USD14.0b.

- YTD: exports fell by 7.6% YoY (Jan-Nov 2018: +7.6%).

- Non-oil & gas products: fell to a 3-month low of -4.7% YoY (Oct: -2.4%) mainly due to a sharp decline in exports of mining (-19.1%; Oct: -3.7%), and weak shipment of manufacturing-based products. Bucking the trend, exports of agriculture continued to grow positively albeit at a slower pace (4.4%; Oct: 7.5%).

- Oil & gas-based products: fell by 15.8% YoY (Oct: -40.7%) weighed down by exports of mining (-21.6%; Oct: - 46.0%) but partially offset by a surge in export of manufacturing products (43.1%; Oct: 2.8%).

● Imports fell for five straight months, down 9.2% YoY in November (Oct: -16.5%; consensus: -13.5%), dragged by weak imports of oil & gas products (-25.5%; Oct: -39.8%)

- By category, weaker imports was associated to a decline in imports of raw materials (-13.2%; Oct: -18.9%) and capital goods (-3.6%; Oct: -11.3%), while imports of consumer goods rebounded sharply to 16.3% (Oct: -4.4%).

- MoM: imports expanded to 3.9% (Oct: 3.5%) to USD15.3b.

● Trade balance turned into a deficit of USD1.3b from a surplus of USD0.2b in October, beating the consensus estimate (-USD0.1b). Overall, total trade extended its fall for the twelve straight months at -7.6% YoY (Oct: -11.6%).

● Forecast maintained with exports to remain subdued in the final month of the year (2019: -5.0% to -10.0%)

- Global slowdown, lingering uncertainty on the trade war front even after the US-China agreed on the phase one trade agreement, low commodity prices, and a decline in domestic demand continue to exert pressure on trade performance going forward. Hence, we expect Bank of Indonesia would remain dovish and retain its easing bias

Source: Kenanga Research - 17 Dec 2019