Non Oil Domestic Export probably picked up in February

Figure will be out on Friday and market may have something to cheer about after the poor outcome of -2.1% YoY in January.

According to DBS Group Research, a surge of 17.9% YoY (5% MoM sa) has been penciled into their forecast.

“What’s driving the rebound is largely technical. After a seasonal decline due to the Lunar New Year in January, it is reasonable to assume a technical pickup in February. But frankly, the underlying story on the export front hasn’t changed much, that the sluggish global demand has not improved significantly over the past month.

Uncertainties in the global economy continue depress consumer demand and investment sentiment, which consequently has weighed down on export performance.

Nonetheless, DBS said that a pickup in export performance could be in sight.

“ Apart from a possible cyclical surge in pharmaceutical export sales, the key electronics segment could be making the bend soon. Latest January US SEMI book-to-bill ratio has registered 0.95, which is near to the crucial parity level and certainly a long way above the bottom of 0.71 recorded in Sep11,” it said.

“ While this electronics leading indicator is still technically showing a contraction in the sector, at least it is suggesting that the pace of decline is slowing. Whether this will lead to a sustained improvement would largely rest upon the development in the US and Europe,” added DBS.

On that, DBS noted that the upside could proved to be limited in the near term.

“In fact, we see NODX performance moving in a sideway fashion after February due to looming global growth concern. Nonetheless, a more pronounced improvement can be expected in the second half of the year when the downside risk to global growth prospects is likely to dissipate,” said DBS.