This article first appeared in The Edge Financial Daily, on January 10, 2017. Consumer sectorMaintain neutral: While the third quarter of financial year 2016 (3QFY16) earnings mainly disappointed, we believe consumer spending will recover slowly in 2017 as the consumer sentiment index should pick up, backed by positive government initiatives. Retail Group Malaysia forecasts a 5% y-o-y growth in 2017 (versus an estimated 3% y-o-y in 2016 and 1.4% y-o-y in 2015), expecting a boost on increased tourist arrivals. Nonetheless, the retail sector remains challenging, with earnings before interest and tax margins and same-store sales growth in a downturn. The food and beverage segment will likely be hit by higher raw material prices, moving forward.

Source: The Edge Markets January 10, 2017 02:40 UTC