● Exports jumped to a 44-month high in March (30.47%; consensus: 11.74%; Feb: 8.5%) above market expectations

- MoM: rebounded sharply (20.3%; Feb: -0.2%) to USD18.4b, highest export value since Aug 2011.

● The higher export growth was attributable to a sharp expansion in non-O&G and O&G-based products as well as higher shipment to major trading partners

- Non-O&G (30.1%; Feb: 8.6%): growth accelerated on broad-based expansion led by higher exports of manufacturing (33.4%; Feb: 7.0%), followed by agriculture (24.2%; Feb: 2.9%) and mining (11.9%; Feb: 7.5%) products. By destination, exports of nonO&G to top trading partners registered a continued expansion, led by a record high to China (88.2%; Feb: 57.3%), followed by the US (32.2%; Feb: 13.7%) and Japan (20.8%; Feb: 5.2%).

- O&G (38.7%; Feb: 6.9%): surged to a 41-month high, attributable to a sharp rebound in O&G manufacturing (63.1%; Feb: - 9.8%) products and expansion in O&G mining (34.3%; Feb: 10.2%) products.

● Imports expanded for the second straight month andacceleratedto a 32-month high (25.7%; consensus: 6.0%; Feb: 14.9%), due to a sharp rebound in O&G (41.9%; Feb: -25.4%) and expansion in non-O&G (23.5%; Feb: 22.0%)

- By segment, the uptrend was led by higher import of raw materials (25.8%; Feb: 11.5%), followed by capital goods (33.7%; Feb: 17.7%) and consumer goods (13.4%; Feb: 43.7%).

- MoM: rebounded sharply (26.6%; Feb: -0.5%) to USD16.8b, a 28-month high.

● Trade surplus narrowed to USD1.57b (consensus: USD1.64b; Feb: USD1.99b) but remained in a surplus for the eleventh straight month. Meanwhile, total trade spiked to a 44-month high (28.2% YoY; Feb: 11.4%) on improved trade activities.

● 2021 exports forecast revised up to 15.1% (2020: -2.6%) on better-than-expected 1Q21 performance

- Exports accelerated in the 1Q21 (17.1%; 4Q20: 6.7%), the highest since 3Q17 despite lingering COVID-19 jitters. Hence, it is expected to contribute positively to GDP growth in the 1Q21 on lower base effect and improve external demand in line with the vaccine-driven economic recovery theme.

Source: Kenanga Research - 16 Apr 2021