the latest announcement that the non-oil export fell 4.6%...while domestic retail improves in April....The news look like an innocent non-event...but I can assure you these figures mean a lot for those who trade the STI. First the domestic retail figures improved because of the lifting of the clampdown on second hand cars, so it was skewed and non-representative of the market sentiments, and the impact will continue in May as the lifting was for two months, April and May. Moreover the May figures are expected to cloud our Big Singapore sales, because with the second hand car figures, the result will be dismal. So, we will see nice May figures...We shall see. The 4.6 non-oil decline is mainly due to electronic output and cushion my pharmaceuticals. Why is the figure significant? It is because it reflects the Christmas sales mood. All electronics are manufactured starting in April with chip buying, plastic molding, assembly and other preparatory works. It also reflects the amount of inventory of toys, laptops, computers, mobile phones, game consoles, TV, camera etc...so the higher the inventory the less need to build more, of course obsolescence also play a role in increase activities. The shipment around April and May will tell us in advance the amount of inventory and new builds needed before September when the Christmas sales start to gather momentum. These are then shipped to other facilities to continue the manufacturing process. The fall in manufacturing means that the retailers are anticipating a sharp drop in Christmas sales...that does not augur well for business activities in the coming months. We should expect the stock market to continue to reflect this and decline till end of 2013....and hope 2014 is better
Posted on: Mon, 24 Jun 2013 09:11:08 +0000
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