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Quick takes: Pullback in April's NODX could be temporary

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Pharmaceuticals, among non-electronic exports, declined 39.9 per cent in April 2017, dragging Singapore's non-oil domestic exports lower by 0.7 per cent year-on-year, a reversal of a five-month growth streak.

PHARMACEUTICALS, among non-electronic exports, declined 39.9 per cent in April 2017, dragging Singapore's non-oil domestic exports lower by 0.7 per cent year-on-year, a reversal of a five-month growth streak.

Even though electronic exports grew 4.8 per cent in April 2017, it was a slight moderation in pace from 5.2 per cent in March 2017.

Here are some economists' comments:

ANZ economist Ng Weiwen:

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Market voices on:

"The moderation in electronic NODX growth - 4.8 per cent in April versus 5.2 per cent in March - potentially points to tentative signs of a maturing tech cycle.

"Against this backdrop and with China reverting back to its old but unsustainable investment-led growth model, we think that it would be challenging for the recent strength in exports to be sustained in the second half of 2017."

OCBC economist Selena Ling:

"NODX expanded 10.9 per cent year-on-year for the first four months of this year, which is still very healthy compared to -8.4 per cent year-on-year for the same period last year, but is likely to remain negative in May at -7.5 per cent year-on-year before levelling off to a more modest pace for the remainder of 2017.

"Our full-year 2017 NODX growth forecast is 0-2 per cent, which is a pickup from the -2.8 per cent year-on-year seen for 2016."

UOB economist Francis Tan:

"The pullback of Singapore's April NODX into the contraction zone may have alarmed many market watchers, especially since it was growing at an average 14 per cent over the past five months, emerging from consecutive declines for the previous 12 months (from November 2015 to October 2016, except for May 2016 when NODX expanded 14 per cent year-on-year).

"However, we think that this is only a temporary, technical pullback from an exceptionally strong month in March."

Citibank economist Kit Wei Zheng:

"Tech restocking momentum continues, but speed bumps elsewhere imply MAS is in no hurry to tighten. Put into perspective, today's downside surprise in trade comes after the exceptional strength in the past two quarters and, as such, levels of NODX and NORX remain comparable to those in Q4 2016.

"Sequential growth in exports of ICs (integrated circuits) is a bright spot, and corroborates our view that the tech cycle may sustain its upswing for longer."

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