MBSB Research is maintaining a “positive” call on the sector.
PETALING JAYA: The consumer sector is expected to remain resilient, supported by a firm labour market, benign inflation, and continued fiscal support under the Ekonomi Madani framework.
In a report, MBSB Research said the increase in the Sumbangan Tunai Rahmah programme and Sumbangan Asas Rahmah cash aid would enhance disposable household income, sustaining consumption among the lower and middle-income groups.
In addition, the RM500mil allocated to drive tourism is expected to spur retail as well as food and beverage (F&B) spending, particularly across urban and tourist-centric areas.
According to MBSB Research, the sector’s recovery is broadening, generating positive spillovers across retail, F&B and hospitality, and reinforcing tourism’s role as a key pillar of domestic consumption.
“These measures, coupled with ongoing job creation and accommodative financing conditions post the overnight policy rate cut, should reinforce sentiment and support year-end spending momentum,” it said.
The research house said retail spending was reported firm in August as trade rose 5% year-on-year to RM67.33bil.
On a month-to-month (m-o-m) basis, retail sales expanded 0.5%, reflecting a steady pickup in consumer activity after July’s pullback of 0.8% m-o-m.
“The monthly improvement was led by non specialised stores and F&B and tobacco, while household equipment softened after earlier gains,” it said.
The country’s labour market remained steady in August with the unemployment rate unchanged at 3%, sustaining its lowest level in a decade.
“The combination of stable employment conditions and moderate price trends continues to underpin real household purchasing power and steady private consumption momentum,” the research house said.
Meanwhile, it added that commodity prices presented a mixed backdrop last month as wheat was weak while raw and white sugar continued to soften.
Cocoa prices were elevated but Robusta coffee recovered.
“Softness in key staples like wheat, sugar and polyethylene terephthalate resin offers some offset although persistent strength in crude palm oil and Arabica coffee continues to underpin input cost pressures across select F&B producers,” it explained.
MBSB Research is maintaining a “positive” call on the sector with top picks including Fraser and Neave Holdings Bhd
and Aeon Co (M) Bhd.
