Singapore exports surge 46.2% on-year in August amid AI demand

Caption language: en · Fetched: 2026-09-18

Welcome back. Singapore's key exports surged by 46% on year in August. Strong AI demand and a boost from last year's low base helped push up the performance. It also beat analyst estimates as growth continued for the 12th consecutive month. Electronic exports is still the main driver of non-oil domestic exports, rising more than 131% in August. Analysts expect demand for AI related hardware to continue as data centers expand. >> It's not just rising tech hardware prices that is driving the increase. It's also real demand and the demand is coming from this ongoing strong pace of data center expansions globally which is driving a lot of orders for you know uh tech hardware such as semiconductors, memory chips, servers, server racks and so on and so forth. Non electronic exports also grew 12% reversing July's decline.

Non-monetary gold expanded by 67% and specialized machinery went up more than 57%. Analysts say the export outlook remains positive. Our outlook for exports in the near term remains positive and will continue to be primarily driven by robust AI lead electronics exports growth. But this uh performance overall would still see uneven some unevenness with height base effects likely to emerge during the latter part of the year. And for more analysis, we're joined by Abdal Rahman, who is the executive director of Wealth Advisory at OCBC. Abdal, good to have you with us. Do you expect exports to be more broad-based and resilient or more reliant on the AI and electronic cycle? >> So, generally when we look at the data, uh growth has been uh rather broad-based across, you know, a number of sectors.

So both the Nordex the electronics Nex had posted about 12 consecutive months of uh growth. Electronics also saw the third straight month of tripledigit growth. So we also we saw a rebound in non uh electronics uh Nordex in July and chiefly because of growth in things like specialized machinery non-monetary gold and medical uh apparatus. So for now, we do think that the cyclical momentum remains really quite strong and there's really no running away from the fact that the AI cycle has been a key driver for all of this. But as long as the global economy remains resilient, it should augur well for uh exports more generally. >> Now looking at the higher Fed rates and also the signals of more to come for Singapore investors in particular, where will this move be felt more strongly?

So following the release of the uh monetary policy statement by the FOMC uh we saw a strengthening of the US dollar uh we saw bond yields heading marginally higher and we also saw gold declining. So those were the uh first order effects uh if you will overnight. We also saw US stocks somewhat waver as the Fed turned pretty hawkish especially based on their dot plot. So ultimately when we talk about higher interest rates it means really higher borrowing costs uh and so rate sensitive sectors such as REITs uh and your more highly leverage companies with weaker balance sheets those tend to feel some of the pressure. Uh at the same time uh higher borrowing cost and elevated bond yields necessarily means there will be a higher hurdle that uh growth comp growthy companies must clear to justify their valuations.

So growth oriented sectors such as technology and and and some pockets of artificial intelligence where profits are expected further out in the future those um might um those might be impacted by uh higher rates as well. >> Now hurdles aside, OCBC had said earlier this month that the AI powered stock boom is entering I quote a proverbial moment of reckoning. Can you explain what that means? So it's really the sense that uh markets are entering sort of a show me the money moment. So uh markets are not just uh blindly rewarding the biggest spenders of AI but they are investors are really looking for proof of profitability.

So uh in investors are essentially trying to work out uh who is who among them are well positioned to really capture value from AI who can you know monetize these investments quickly and uh deploy capital more efficiently. So especially now that we are in a higher for longer interest rate environment where you know capital is no longer cheap uh and there's a lot more options from which you can get a return and rightfully investors are becoming pickier about where they allocate their money. So the result of this uh uh uh this show me the the money moment has been really greater dispersion or variability in returns. So at one point uh you saw hyperscalers or the max 7 almost trading as a cohesive block but right now uh you're seeing quite a bit of uh variability in the return in the returns even among these uh mega cap stocks.

>> Now to capture that investor confidence Singapore is pushing hard on developing AI and also scaling it across industries. How should investors reconcile the concerns with AI and also the opportunities it could create? So I think whether we like it or not, AI is a structural trend that here to stay. It is uh inevitable, right? So for investors, I think the key challenge is really to uh separate the opportunity uh from the hype, extract the signal from the noise. So uh I think investors should broaden their view about AI and look beyond uh crowded trades or popular names like your uh well-known semiconductor names or hyperscalers. So the AI value chain is very extensive.

So it stretches from you know your mid-stream uh beneficiaries such as cloud infrastructure, data centers, cyber security uh then you also have your downstream companies that are actively harnessing AI in enterprise software industrial applications. Uh you have AI enablers uh uh in terms of power infrastructure connectivity and even critical minerals. So the AI value chain is really quite extensive and quite uh rich. So uh basically the idea is to look broadly at the value chain and to be also selective on where uh you allocate your your exposure especially within uh this AI sectoral theme. >> Abdal thank you so much for your analysis. That was Abdal Rahman from OCBC.