1. KBank Capital Market Perspectives Market Updates
Macro / FX / Rates
Exports and imports fell in November, trade deficit rose
20 December 2011
Overview:
Nalin Chutchotitham
- The Ministry of Commerce reported November’s custom-cleared trade data nalin.c@kasikornbank.com
today. Exports fell by 12.4% yoy, worse than the expected 9.0% fall expected by
the market based on Bloomberg’s survey and when compared to October’s slight
increase of 0.3% yoy. Imports also fell by more-than-expected at -2.4% yoy
compared to previous month’s 21.5% gain.
- Total exports for the month totaled USD15,498mn, the lowest level since April
2010 while imports totaled USD17,192mn, lowest since February this year.
Meanwhile, the trade balance registered a larger deficit of USD1,373mn
compared to October’s deficit of USD1,009mn. Total trade surplus for the first
half of the year had been USD3,447mn but the slowdown in global economy and
production disruption caused by the floods resulted in a trade balance deficit of
USD549mn in the second half so far.
- Exports volume remained low for a second month as manufacturing production
and logistics were disrupted by severe floods during most of the quarter. To
highlight on the impact on the auto industry, domestic auto sales in November
extended decline from October to 25,664 units or a 40% mom fall. This is
drastically low compared to the average monthly sales of 71,384 units during the
first 10 months of the year. In any case, we do expect that auto sales would see
robustness in the year 2012 as households and businesses replaced damaged
vehicles and after the auto industry is able to return to full production by,
hopefully, the second quarter. Tourism industry faced negative impacts from the
floods as well. Tourist arrivals for November fell to the lowest level this year at
1.21 million compared to the average of 1.58 million during the first 10 months.
- In particular, exports of industrial goods extended its fall to 26.7% yoy
compared to October’s decline of 11.8% yoy. The major export items such as
electronics (-47.4% yoy), electrical equipment (-21.9% yoy), and vehicles and
parts (-54.7% yoy) fell by a larger extent in November compared to October (by
USD value), indicating the severity of supply chain disruption and stagnation of
activities in several industrial parks in the Central region. Exports of agricultural
products continued to gain but at a slower pace of 11.3% yoy compared to
October’s growth of 35.8%. In particular, exports of rubber and rubber products
remained strong at 24.1% yoy and 20.1% yoy growth. Overall, exports of food
products continued to grow at 11.3% yoy.
Exports and imports value (Customs-cleared data) Trade balance (Customs data)
$ mn Trade balance
USD mn
25,000 4,000
$ 11.6bn $ 2.9bn
22,500 3,000
20,000
2,000
17,500
15,000 1,000
12,500
0
10,000
-1,000
7,500
Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 -2,000
Exports Imports Jan-09 May-09 Sep-09 Jan-10 May-10 Sep-10 Jan-11 May-11 Sep-11
Source: Bloomberg, KBank Source: Bloomberg, KBank
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2. - Impact on USD/THB after the release of the trade figures is difficult to determine
but the pair did trade higher to above 31.30 vs. this morning’s level near 31.25.
However, the weak exports performance is likely to warrant a more dismal
outlook for the overall economy going forward. Should indicators of domestic
demand continued to reflect weakness in the economy, the Bank of Thailand is
likely to consider further policy rate cut. We continue to expect a 25bp rate cut in
January’s monetary policy decision to further support a speedy recovery.
- We expect the USD/THB to face upward pressure during the first quarter of 2012
based on weaker exports and low appetite for emerging market assets in the
near-term. However, balance of payments numbers should improve towards the
second half of the year and we remain comfortable with our target of 29.50 for
the USD/THB at year-end 2012. For the first half, we expect some volatility
and sees the USD/THB range at 30.50-32.50.
Exports and imports growth (Customs-cleared data) Domestic auto sales in October fell drastically
'000 '000
% yoy
80 60 100
60 50 80
40
20 40 60
0 30 40
-20
20 20
-40
-60 10 0
Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11
Export (% YoY) Import (% YoY) Passenger car Commercial car Total car sales (right axis)
Source: Bloomberg, KBank Source: Bloomberg, KBank
SET index sees support from LTF and RMF purchases
Tourist arrivals fell for the 3rd month
compared to the fall in MSCI Asia ex Japan index
'000 M onthly tourist arriv als
1200 650
2,000
600
1100 1,800
550 1,600
1000
1,400
500
1,200
900
450
1,000
800 400 800
Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
SET Index (left) MSCI Asia ex Japan Index (right) 2008 2009 2010 2011
Source: Bloomberg, KBank Source: CEIC, KBank
Asian currency performance 3-month period Asian currency performance year-to-date
CNY 0.6% CNY Change against USD, year-to-date 4.1%
Change against USD, 3-month JPY
PHP -0.9% 4.1%
KRW -1.1% PHP -0.1%
TWD -1.4% IDR -1.7%
JPY -1.9% SGD -1.8%
MYR -2.0% KRW -3.1%
IDR -2.8% TWD -3.4%
THB -2.9% MYR -3.9%
SGD -3.6% THB -4.0%
INR -9.4% INR -15.7%
-12.0% -10.0% -8.0% -6.0% -4.0% -2.0% 0.0% 2.0% -20.0% -15.0% -10.0% -5.0% 0.0% 5.0%
Source: Bloomberg, KBank Source: Bloomberg, KBank
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4. Disclaimer
For private circulation only. The foregoing is for informational purposes only and not to be considered as an offer to buy or
sell, or a solicitation of an offer to buy or sell any security. Although the information herein was obtained from sources we
believe to be reliable, we do not guarantee its accuracy nor do we assume responsibility for any error or mistake contained
herein. Further information on the securities referred to herein may be obtained upon request.
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