● Exports’ YoY growth slowed in September (47.6%; consensus: 51.6%; Aug: 64.1%), beating market expectations but remained supported by the lower base effect

- MoM: fell by 3.8% (Aug: 10.5%) to USD20.6b.

● Exports YoY growth remained supported by the base effect

- Non-O&G (48.0%; Aug: 63.5%): growth slowed, as agriculture fell (-5.0%; Aug: 0.1%) and manufacturing moderated sharply (34.3%; Aug: 52.6%). Nonetheless, growth remained supported by expansion in mining products (183.6%; Aug: 166.7%) and partly due to the base effect. By destination, most key export destinations of non-O&G broadly moderated, but still led by China (73.3%; Aug: 93.9%), followed by Japan (45.2%; Aug 67.9%) and the US (38.7%; Aug: 39.1%) due to base effect.

- O&G (39.8%; Aug: 77.9%): growth moderated sharply but remained high due to base effect and supported by high receipts of mining products (359.5%; Aug: 226.6%).

● Imports slowed (40.3%; consensus: 50.0%; Aug: 55.3%), lower than market expectations due to broad based slowdown in nonO&G (38.2%; Aug: 59.1%) and O&G (59.1%; Aug: 115.8%)

- By segment, the growth was mainly supported by the base effect, led by consumer goods (59.7%; Aug: 58.3%), followed by raw materials (45.5%; Aug: 59.6%) and capital goods (10.1%; Aug: 34.6%).

- MoM: fell by 2.7% (Aug: 10.4%) to USD16.2b.

● Trade surplus narrowed (USD4.4b; Aug: USD4.7b) but beating market expectations (consensus: USD3.8b). Overall, total trade moderated (44.3% YoY; Aug: 60.1%).

● 2021 export growth forecast revised to 38.6% from 15.1% (2020: -2.6%)

- Year-to-date, exports grew by 40.4% to USD164.3b (Jan-Sep 2020: USD117.0b), exceeding total export value in 2020 (USD163.2b) driven by improving external demand amid wider vaccination programs and continued economic stimulus among advanced economies. Export growth is expected to remain elevated in the near term amid expected pent-up demand as increasingly more countries gradually reopen their economy and partly due to the base effect.

Source: Kenanga Research - 18 Oct 2021