Why analysts are anticipating an upside blip in December NODX

Headline NODX seen to recover to 3.1%.

According to DBS, expect a seasonal rebound in December non-oil domestic export (NODX) figure due tomorrow morning.

Headline NODX is likely to recover to 3.1% YoY, up from a plunge of 8.8% in the previous month. Sequential change will probably report a 3-4% MoM sa expansion, which contrasts sharply with the massive 9.3% fall in November.

Here's more:

The dip in November NODX in our opinion is mainly due to two factors: a moderation in post-Christmas season demand and an industry specific downswing in the biomedical cluster.

While there is a fair chance that both factors may have persisted into December, demand for electronics components may also pick up in the month, ahead of a forthcoming Chinese New Year lull.

It’s seasonal effect at full swing. Plants in China will typical ramp up their production ahead of the New Year holiday when production will stop completely for about 2 weeks thereafter. Hence, orders for components from local manufacturers have a tendency to spike up before the festive season so as to cater to the rise in production.

This will be the main reason for the upside blip in December NODX on top of the fact that global economic conditions are generally improving.