● Exports fell sharply in June (-21.2% YoY; May: 0.9%), lower than the consensus forecast (-18.7%), partly due to the high base effect recorded last year and weaker global trade activity
- MoM: contracted (-5.1%; May: 12.6%) after recording a sharp rebound in the previous month.
● Export growth was weighed down by weak shipment of O&G and non-O&G products and subdued demand among major trading partners
- Non-O&G (-21.3%; May: 1.9%): growth contracted after a positive turnaround in the previous month. This was primarily attributed to a broad-based slowdown, led by weak mining (-37.9%; May: -21.0%), followed by manufacturing (-15.8%; May: 10.3%) and agriculture (-0.7%; May: 32.4%) products. Similarly, subdued demand was recorded across major trading partners, as reflected by Japan (-23.2%; May: 8.2%), the US (-20.6%; May: -0.2%) and China (-10.0%; May: 4.0%).
- O&G (-18.7%; May: -12.5%): remained contracted for the fourth straight month and weakest since November 2020 due to subdued mining (-24.5%; May: -11.1%) and manufacturing (-4.2%; May: -15.5%) products.
● Imports fell sharply (-18.3%; May: 14.3%), lower than consensus (-7.8%) due to weak imports of O&G (-39.5%; May: -6.5%) and non-O&G (-13.9%; May: 18.9%)
- By category, it was a broad-based slowdown led by a decline in growth for raw materials (-23.8%; May: 4.4%), followed by consumer goods (-6.6%; May: 36.5%) and a sharp moderation in capital goods (4.1%; May: 60.3%)
- MoM: growth contracted (-19.4%; May: 38.7%), following a sharp rebound in the previous month.
● Trade surplus widened to a two-month high (USD3.5b; May: USD0.4b), beating consensus (USD1.4b) as imports fell sharply than exports on a MoM basis. Meanwhile, total trade fell sharply (-19.9% YoY; May: 7.1%).
● 2023 export growth forecast retain at -3.4% (2022: 26.1%), banking on a recovery by year-end
- Year-to-date, exports fell by 8.8% YoY largely due to lower commodity prices and weakening external trade further compounded by a global economic slowdown amid global monetary policy tightening. This was also associated with a diminishing lower base effect and a slower-than-expected recovery in China's economy. Nevertheless, we expect China's economy continues to recover and exert a positive influence on the export landscape.
Source: Kenanga Research - 18 Jul 2023
Created by kiasutrader | Aug 23, 2024
Created by kiasutrader | Aug 23, 2024