• Exports fell for the eighth straight month (-8.1% YoY; Dec: -5.8%), far below consensus (-2.7%)
  
  − MoM: fell sharply (-8.3%; Dec: 1.8%), marking a nine-month low, reflecting a weak start to 2024.

• Falling exports due to persistent weakness in non-O&G and further weighed by subdued O&G products
  
  − Non-O&G (-8.2%; Dec: -6.3%): growth contracted for the eighth straight month due to sustained weaknesses in mining (-23.5%; Dec: -12.2%) and manufacturing (-3.7%; Dec: -4.4%) products. Bucking the trend, agriculture (0.1%; Dec: -3.9%) products rebounded marginally. By destination, shipment to major trading partners remained weak, particularly to Japan (-22.7%; Dec: -22.5%) and China (-12.9%; Dec: -0.3%). However, increased demand from the US (2.2%; Dec: 0.3%) partially mitigated the slowdown.
  
  − O&G (-6.1%; Dec: 1.4%): a big drop, mainly due to a sharp contraction in manufacturing (-24.6%; Dec: 91.1%) following a surge in the previous month. The downturn was partially mitigated by a growth rebound in mining (4.7%; Dec: -23.7%)

• Imports rebounded marginally (0.4%; Dec: -3.8%), but below expectations (consensus: 1.3%). Growth was primarily supported by a rebound in non-O&G imports (1.8%; Dec: -5.6%)
  
  − By category, attributable to a sharp rebound in capital goods (10.2%; Dec: -9.9%) but was capped by persistentweakness in raw materials (-3.0%; Dec: -4.4%) and moderate growth in consumer goods (11.0%; Dec: 13.5%).
  
  − MoM: growth contracted (-3.1%; Dec: -2.4%) at a faster pace.

• Trade surplus narrowed (USD2.0b; Dec: USD3.3b) to a six-month low, below consensus (USD3.0b) as exports declined more than imports on a MoM basis
  
  − Likewise, total trade remained weak, contracting for the eighth month (-4.3% YoY; Dec: -4.9%), but at a slower pace.

• Our 2024 export forecast remains at 0.8% (2023: -11.3%), reflecting a cautious global trade outlook
  
  − Export growth is poised for a marginal rebound in 2024, largely due to last year’s lower base effect brought by weak global trade activity, and lower commodity prices coupled with China’s slower-than-expected recovery. China’s economic revival is anticipated to drive growth this year, though geopolitical tensions could constrain potential gains.

Source: Kenanga Research - 16 Feb 2024