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Quick takes: Singapore's Nodx beats market consensus again

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Singapore's non-oil domestic exports (Nodx) surprised market consensus again and expanded 9.4 per cent in December compared to a year ago.

SINGAPORE'S non-oil domestic exports (Nodx) surprised market consensus again and expanded 9.4 per cent in December compared to a year ago.

The latest jump follows from the 11.5 per cent year-on-year growth in November, which was a strong reverse from October's contraction of 12 per cent year-on-year.

Here are some economists' comments:

Francis Tan, UOB:

"The improvement in December Nodx was due to gains in both the electronic (+5.7 per cent year-on-year) and non-electronic exports (+11.3 per cent year-on-year).

"Overall Nodx expansion in 2017 could well come from the recent optimism in Singapore's electronics exports. The 2-month on-year gains in electronics exports was a result of past months of higher manufacturing activities and inventory accumulation in the semiconductor segment. In addition, the past 5 months of expansion (after an 18-month consecutive decline) in the new export orders for electronics PMI points to a more sustained pickup in Singapore's electronics exports at least in H1 2017.

"With the December trade numbers released today, Singapore's 2016 NODX contracted 3.2 per cent, marking the 4th full year of Nodx decline. Although trend Nodx growth seems to point to a recovery in Singapore's export numbers in 2017, we are carefully watching the negative impact from the anti-globalisation rhetoric that has been fueling developed markets' sentiments.

"One country to watch out is still the US. In a paper by the Ministry of Trade and Industry, the US is the 2nd largest source of final demand of the goods produced in Singapore (ASEAN is the largest) and further trade-protectionistic measures will only hurt the path of our export recovery. We maintain our forecast of 2017 Nodx growth at 0.7 per cent."

Euben Paracuelles and Brian Tan, Nomura:

"The data suggest Singapore is benefiting from the recent strength in electronics demand that has also boosted exports from Taiwan and South Korea.

"However, we remain cautious over the sustainability of the export pick-up. We note that the US semiconductor equipment book-to-bill ratio has fallen to below one.

"Given the host of headwinds and downside risks − both external and domestic − confronting the Singapore economy, we continue to forecast full-year growth of 0.7 per cent in 2017, below the official 1.0-3.0 per cent forecast range and slowing from 1.8 per cent in 2016."

Selena Ling, OCBC Bank:

"We tip 2017 Nodex growth at 0-2 per cent year-on-year, with the caveat that Trump's anti-trade/China policies if they materialise could present a potential headwind."

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