Singapore October NODX: Pharma drives an upside surprise

Singapore's non-oil domestic exports fell a marginal 0.5% y/y in October (Sep: +0.3%; Aug: -8.4%), stronger than expected (consensus: -3.0%). On a m/m sa basis, exports grew 1.1% m/m, following a strong 2.8% expansion in September (Aug: -4.6%; Jul: 2.5%). The upside surprise was largely driven by the volatile pharmaceutical sectors, where output surged 44.6% y/y in October (Sep: 6.5%; Aug: -9.3%). This alone added 4.1pp to the headline, mitigating weakness from the electronics exports, which subtracted 1.1pp from the NODX growth in October. 

In level term, electronics still posted a decent bn shipment value(Sep: bn; Aug: bn). There are emerging signs that point to improved demand in Europe, but the lift expected from US remained relatively muted for now. 

"We still believe stronger demand ahead of the holiday season will come in later in the year. The moderate lift from pre-Christmas orders is likely to alleviate weakness from the inventory buildup", says Barclays.