● Exports fell lesser than expected at -0.2% YoY in March (consensus: -6.7%; Feb: 12.0%)
- MoM: moderated to 0.2% (Feb: 3.1%) to USD14.1b.
- 1Q20: rebounded to 2.9% YoY (4Q19: -3.8%).
● The decline in exports was attributable to a broad-based slowdown in oil & gas and non-oil & gas-based products
- Oil & gas: fell sharply by 40.9% YoY (Feb: -27.5%), its eight straightmonth of decline,due to sluggish exports of mining (-43.6%; Feb: -33.8%) and its manufacturing sub-sector (-17.8%; Feb: 44.0%).
- Non-oil & gas: moderated to 3.4% YoY (Feb: 15.8%) on broad-based slowdown of its subcomponents led by manufacturing (8.5%; Feb: 19.3%), agriculture (18.0%; Feb: 28.4%) and mining (-15.3%; Feb: 0.0%).In addition,weak shipmentwere recorded at its top three destinations led by Japan (-2.5%; Feb: 10.5%), China (0.4%; Feb: 22.2%) and the US (13.8%; Feb: 28.3%).
● Imports fell for the ninth straight monthsto -0.8% YoY albeit lesser than the previous month (Feb: -5.5%; consensus: -7.9%), mainly due to a decline in non-oil & gas products (-1.6%; Feb: -7.9%)
- By category, weaker imports were attributable to a continued decline in capital goods (-18.1%; Feb: -16.4%) while partially offset by a recovery in consumer goods (10.7%; Feb: -12.8%) and raw materials (1.7%; Jan: -2.1%).
- MoM: imports rebounded sharply by 15.6% (Feb: -19.1%) to USD13.4b.
● Trade balanceregistered a smallersurplus of USD0.7b (Feb: USD2.5b). Meanwhile, total trade fell by 0.5% YoY (Feb: 3.3%).
● Impact of COVID-19 on production supply chain and domestic demand to be reflect in the ensuing months
- Year-to-date, exportsmoderated to 2.9% YoY (Jan-Feb: 4.6%), signalling a subdued external demand.Going forward,weexpect the adverse effect of COVID-19 on the trade performance would further be amplified from April onwards as the virus outbreak escalates, forcing the government to impose travel restriction and declared health emergency.
- Nonetheless, we revise down our export forecast for 2020 to a range of -5.0% to -2.0%, from an initial target of 1.0% to 4.0% (2019: -7.0%) on the expectation of weak global demand and commodity prices brought by the pandemic.
Source: Kenanga Research - 16 Apr 2020
Created by kiasutrader | Aug 26, 2024