CONSUMER STAPLES AND TRANSPORT-RELATED COUNTERS SEEN RIDING RAYA WAVE

By Zufazlin Baharuddin

KUALA LUMPUR, March 16 (Bernama) – Companies with a strong brand position and better cost management are likely to deliver improved quarterly results, driven by festive sales, which in turn could support their share price, analysts said.

Berjaya Research Sdn Bhd head of research Kenneth Leong said the consumer products and services sectors, particularly consumer staples, along with land transport-related counters such as bus operators, typically benefit from the Hari Raya festive period.

“Consumer spending usually increases during the festive season as households ramp up purchases of food, beverages, and other essential items in preparation for celebrations. From a stock market performance perspective, the market often prices in festive demand ahead of the actual holiday period, leading to potential pre-Raya share price gain in consumer and travel-related stocks,” he told Bernama.

Therefore, he said, historically, strong seasonal demand and solid consumer spending during festive periods tend to lift their financial performance during the quarter. Land transportation players are likely to see stronger demand, supported by the usual surge in travel activities as people return to their hometowns for the holidays.

“For transportation-related stocks, the impact on the West Asia crisis will be minimal as petrol prices are subsidised by the government, with public buses and specific commercial transport vehicles also eligible for subsidised rates, and most Malaysians have already made their bookings ahead of the festive period,” he added.

Leong noted that major counters that typically benefit included 99 Speed Mart Retail Holdings Bhd, MR DIY Group (M) Bhd, AEON Co (M) Bhd, and Perak Transit Bhd, which operates public transport terminals.

However, he said that in an environment of elevated input costs and cautious consumer sentiment, any potential upside could be capped, especially amid renewed geopolitical conflict in West Asia.

Rakuten Trade Sdn Bhd vice-president of equity research Thong Pak Leng said major retailers such as Eco-Shop Marketing Bhd, Fraser & Neave Holdings Bhd, Kawan Food Bhd, and Nestle (Malaysia) Bhd usually perform better during major festive seasons.

“Fast-moving consumer goods companies and retailers will benefit from the Raya festive season because these companies usually report stronger revenue during the festive season. With the stronger ringgit against the US dollar, the cost of goods should be lower for manufacturers. Investors usually price in these stocks, as festive seasons are recurring and not a surprise long holiday,” he said.

Genting Malaysia Bhd could benefit from the long holiday period, as the extended break encourages more domestic travel and leisure activities, driving higher visitation to its resorts and theme parks, he added.

-- BERNAMA