Singapore exports slip, but recovery on track

Singapore exports slip, but recovery on track

SINGAPORE (Reuters): Singapore posted disappointing export data on Tuesday, with non-oil exports slipping 0.7 percent in March year-on-year, but analysts said the overall trend pointed to a gradual recovery.

The fall in non-oil exports to S$8.35 billion (US$4.84 billion) was worse than market expectations but represented an improvement over the past few months, economists and the Trade Development Board (TDB) said.

Exports of electronics goods, comprising 70 percent of Singapore's non-oil exports, fell 5.6 percent in March compared with the same month a year earlier.

The TDB said in a statement that the deterioration of Singapore's external trade as calculated on a three-month moving average appeared to be stabilizing.

"Total trade recorded a more moderate decline of 9.4 percent in March 1999, after shrinking by double-digit rates for five consecutive months," the TDB said.

The February three-month average was minus 13 percent, and in January, minus 12.7 percent.

"On balance, I think that the numbers are not a complete surprise," Kaan Quan Hon, economist with DBS Securities said.

Kaan, like others, was hopeful that smaller declines in March exports signaled brighter economic prospects ahead.

"The trade figure did have a sobering effect on the (stock) market...which is not a bad thing; the last few days there was a bit of the market running ahead of fundamentals," he said.

Singapore's key Straits Times Index slid 1.78 percent on Tuesday after surging four percent to an 18-month high on Monday.

The market had expected a rise in exports after Deputy Prime Minister Lee Hsien Loong last week gave a generally positive assessment of recovery in the region, including Singapore.

Liew Yin Sze, economist with J.M. Sassoon Securities, said the March non-oil domestic export number was not bad, though slightly below market consensus.

A Reuters poll on Monday produced an average rise of 1.2 percent year-on-year for March.

"We had expected a positive number after what Lee said. But March last year was a very strong year," he said, referring to the high base comparison with March 1998.

"If you look at the chart, there is still an improvement in March over the last few months. So in essence he is right, there is an improvement. But expectations were a bit raised after his comments," Liew added.

Eddie Lee, economist with Vickers Ballas, noted that non-oil exports improved after falling an average of about 5.0 percent in the first two months of the year.

On electronics, some were disappointed with the 15 percent drop in March disk drive exports, a sector which had shown promise recently.

"I must say that the sharp drop was unexpected...It could signal price pressures on the product," DBS' Kaan said.