● Exports’ YoY growth slowed in November (49.7%; Oct: 53.4%) but beating market expectations (consensus: 44.0%)

- MoM: expanded for the second straight month by 3.7% (Oct: 6.9%) to USD22.8b, a record high.

● Growth was supported by higher receipts of O&G and higher shipment to the US and Japan

- Non-O&G (48.4%; Oct: 52.8%): broad-based slowdown led by mining (145.6%; Oct: 190.6%), followed by manufacturing (33.7%; Oct: 36.5%) products and weaker agriculture (-4.0; Oct: -2.9%). By destination, export of nonO&G to major trading partners registered a sharp increase led by the US (58.2%; Oct: 43.0%), and JP (38.5%; Oct: 32.9%).

- O&G (74.8%; Oct: 66.8%): growth expanded, supported by a sharp rebound in receipts of manufacturing products (273.2%; Oct: -74.0%).

● Imports expanded (52.6%; Oct: 51.1%), far beating market expectations (consensus: 37.6%). Growth was driven by a sharp expansion in O&G (178.8%; Oct: 75.9%) and sustained growth of non-O&G (40.8%; Oct: 48.3%)

- By segment, the import growth was supported by a solid expansion in import of raw materials (60.5%; Oct: 55.8%) and consumer goods (53.8%; Oct: 53.4%). However, import of capital goods (23.1%; Oct: 29.4%) slowed, on-base effect.

- MoM: surged to a five-month high (18.6%; Oct: 0.4%) to USD19.3b.

● Trade surplus narrowed (USD3.5b; Oct: USD5.7b) to a five-month low, lower than market expectations (consensus: USD4.5b). Total trade slowed (51.0% YoY; Oct: 52.4%) but reached a record high of USD42.2b in absolute terms.

● 2021 export growth forecast retained at 38.6% (2020: -2.6%) while to moderate sharply to 1.7% in 2022 on base effect

- Year-to-date, exports rose 42.6% to USD209.2b (Jan-Nov 2020: USD146.7b), far exceeding total export value in 2020 (USD163.2b). Growth is expected to remain elevated in the final month of 2021, albeit moderating, in line with festive season pent-up demand, coupled with reopening economic activities domestically and in most major trading partners. Nonetheless, downside risk to growth remains with the emergence of the Omicron variant.

Source: Kenanga Research - 16 Dec 2021