MIDF Research maintains ‘neutral’ call on consumer sector

KUALA LUMPUR, MIDF Amanah Investment Bank Bhd Research (MIDF Research) has maintained its “neutral” call on the consumer sector due to an absence of significant positive catalysts and amidst soft consumer sentiment.

In a note today, MIDF Research, however, believed that private consumption growth would remain above seven per cent in 2019, driven by supportive monetary and fiscal policy changes, which includes Bank Negara Malaysia’s Overnight Policy Rate cut (in May this year) as well as steady retail fuel prices.

“Nevertheless, not all sub-segments are expected to perform equally well. We expect companies which provide basic necessity products to fare better in comparison with those providing discretionary items such as fashion products,” it said.

In addition, the research house said companies which have a diverse products portfolio across different geographical locations, would further reinforce their earnings quality.

“That being said, the well-being of food and beverage manufacturers would primarily depend on their ability to offer value-for-money products to the general masses,” it added.

MIDF Research inferred that the financial performance of consumer companies was heavily reliant on the willingness of consumers to spend.

Due to the absence of significant positive catalysts, we are reiterating our ‘neutral’ stance on the consumer sector,” it said.

Source: BERNAMA (News Agency)