KUALA LUMPUR: Kenanga Research has reiterated its “neutral” rating on the consumer sector for 2019.
In a note yesterday, it said 2019 could be a challenging year with the adoption of new policies, which might put some pressure on consumer spending.
“Additionally, the absence of sporting events this year could translate to less impulse-driven consumption,” it said.
Meanwhile, Kenanga said the ringgit which had continued to weaken against the US dollar, could drive costs up for importers, but might benefit some exporters.
“Despite this, consumer stocks, performed better than the benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) against year-end sentiment pressure. We expect this to persist, given the relatively stable nature of the sector in comparison to others,” it said.
Moving forward, Kenanga said in the near-term, the fourth quarter of 2018, being the first full quarter under the new Sales and Services Tax (SST) regime, could demonstrate softness.
“However, this could be offset by seasonal forward buying ahead of 2019’s earlier Chinese New Year period,” it added. –Bernama
In terms of investor sentiment, the research house continues to anticipate that consumer counters could remain sturdy, in lieu of being the “safe haven” picks during economic uncertainty. - BERNAMA
