Wednesday August 8, 2012
Consumer stocks among biggest gainers on Bursa
By YVONNE TAN
PETALING JAYA: Consumer stocks were sprinkled across the gainers' list on Bursa Malaysia amid the lack of catalysts and uncertainties on the external front.
Consumer stocks, which are defensive in nature, would dominate trading when there were lack of market catalysts and uncertainties, as in the current environment with the on-going eurozone debt crisis.
The stocks are normally less sensitive to major economic and political changes hence their label “defensive”. Most of them are high dividend-yielding stocks.
The consumer sector is set to play catch-up in the immediate term even as it underperformed recently.
In July, the consumer discretionary sector underperformed by 2.1% against the other sectors across Asian bourses such as telecoms which was up 3.9%, energy (3.6%) and financials (2.7%), according to JPMorgan.
In the same month, the FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) was up some 2% while the MSCI Asia ex-Japan Index, an index that measures the equity market performance of Asian markets was higher by 1.3%.
“So, it shouldn't be long before the consumer sector starts playing catch-up,” Lim said.
While there had been good news streaming in from overseas lately such as better corporate results, negative news continue to affect investor sentiment globally.
For example, Italy reported that its economy shrunk by 0.7% in the second quarter, following a 0.8% decline in the previous quarter. The economy, which is the eurozone's third largest, has not been growing for the past one year.
“Still too much bad news at this point, we expect Bursa to trade side-way for the rest of this week, at best,” remarked a technical analyst.
The FBM KLCI closed down 0.51% to 1,631.12 yesterday.
Interestingly,overseas investors bought a net RM3.3bil of Malaysian stocks in July (-RM800mil in June), according to CIMB Reseach.