KUALA LUMPUR: Consumer stocks were among the top losers on Bursa Malaysia during Tuesday afternoon trading.
Nestle (M) Bhd
slid 76 sen to RM95.72, Fraser & Neave Holdings Bhd fell 30 sen to RM26.70, Padini Holdings Bhd lost two sen to RM2.17 and MSM Malaysia Holdings Bhd declined one sen to RM1.22.
According to BIMB Securities Research, the food and beverage (F&B) sector is expected to benefit from a projected rise in disposable income, with consumers shifting towards premium options within the same product categories.
The research house noted that commodity prices for cocoa, coffee and milk powders are on an uptrend, while other commodity prices have stabilised from their all-time highs caused by the Ukraine-Russia war.
“Companies under our coverage that could be affected are Nestle, Farm Fresh Bhd and Dutch Lady Milk Industries Bhd. However, our in-house economics team forecasts a strengthening ringgit, year-end 2025 forecast of RM4.25, which is expected to benefit MSM, Farm Fresh, MR DIY Group Bhd, Padini and QL Resources Bhd.
“Finally, the increase in the sugar tax on sugary drinks, from 50 sen to 90 sen per litre is deemed to have minimal impact, as most companies are operating well below threshold,” it said.
The research firm said a boost in consumer spending is anticipated from the upcoming civil servant wage hike, minimum wage hike, continued and higher allocation of cash assistance like Sumbangan Tunai Rahmah, Employees Provident Fund (EPF) Account 3 withdrawals and robust tourism activities.
“Nonetheless, we are cautious on the downside risk caused by the implementation risk from the subsidy rationalisation initiative of RON95 and the negative impact on companies’ operating costs attributable to the increase in minimum wage, as well as possible employer’s EPF contribution to foreign workers,” it said.
However, the brokerage said its in-house economics team forecasts a stable inflation rate of 2.7% despite the floating of RON95 as only the high-come T15 group are required to pay at the floating price and stable Brent oil price. BIMB is maintaining its “overweight” rating on the consumer sector.
Its top pick for the sector is Farm Fresh Bhd, MR DIY Group, and Aeon Co (M) Bhd.
