Quick takes: Analysts on surprise rise in Singapore's non-oil exports

Singapore's non-oil domestic exports unexpectedly rose in September, confounding analysts who had expected shipments to contract by 3.8 per cent, for a third straight month of decline.
Singapore's non-oil domestic exports unexpectedly rose in September, confounding analysts who had expected shipments to contract by 3.8 per cent, for a third straight month of decline.PHOTO: ST FILE

SINGAPORE - Singapore's non-oil domestic exports (NODX) unexpectedly rose in September, confounding analysts who had expected shipments to contract by 3.8 per cent, for a third straight month of decline.

On a year-on-year basis, NODX increased by 0.3 per cent last month, in contrast to the 8.4 per cent slide in August, thanks to a rise in electronic shipments which outweighed the fall in non-electronic NODX.

Electronic NODX gained 5.7 per cent year-on-year (yoy) in September, reversing the 2.7 per cent yoy decline a month ago. Meanwhile, non-electronic exports fell 1.9 per cent yoy, following the 10.7 per cent yoy slump a month ago.

Here are some quck reactions from analysts:

OCBC Bank's head of treasury research & strategy, Ms Selena Ling:

"Still a very divided performance for the top 10 NODX markets - NODX grew in 5 markets led by Japan, Thailand and Indonesia, whereas NODX fell for the other 5 markets which accounted for 45.9 per cent of total NODX (namely China, US, South Korea, Taiwan and the EU28). Notable was the third consecutive month of deterioration in NODX to China (Sept:  -12.9 per cent yoy), while Japan saw a strong bounce back in NODX at +23.4 per cent yoy.

"Too early to tell if the upward NODX momentum can sustain in 4Q15... the real test of the pudding would be the coming months to see if the uptick lasts, especially for electronics exports. For the full-year we're still likely looking at a base-case scenario of flattish NODX growth for 2015."

UOB Bank:

"The upside surprise in September NODX helped to allay some fears that Singapore may continue to experience contraction in exports until the end of the year, which could also see fears of 'technical recession' being re-visited in the upcoming final estimates of 3Q GDP to be released in November.

"It was also hopeful that the slight easing by the MAS on Oct 14 could help support some incremental export volume in the months ahead. However, with Singapore's relatively high import content that resides within its exports, the slower appreciation in the S$NEER (MAS' weighted exchange rate for the Singapore dollar) may have limited positive impact on final export demand. The more important aspect... will be income growth in our key exporting destinations, namely, China, Malaysia, Indonesia and the US.

However, the on-going global growth slowdown that is tied to the lacklustre growth in China, our top exporting country, as well as the deflationary trend in commodities continues to pose a risk to Singapore's NODX in the coming months.

We remain cautious about the export outlook and therefore maintain our 2015 NODX forecast of a 1 per cent contraction.