RHB Research has downgraded the consumer sector to 'neutral' from 'overweight', as current premium valuations are deemed hard to sustain.
"We believe the consumer stocks are traded at premium price-to-earning (PE) valuations due to strong buying interest in defensive and dividend-yielding stocks, amid economic uncertainty and relatively low returns elsewhere," RHB said on Thursday. Its coverage on the consumer sector comprises 10 stocks, with QL Resources Bhd and Super Group
named top picks.
The consumer sector has outperformed the FBM KLCI index
by 14 percent since the beginning of the year, although this will be increasingly difficult to maintain as yields compress, said RHB.
RHB said the performance has not been across the board, with Parkson Holdings Bhd declining 14 percent, while AEON Co(M) Bhd gaining 70 percent since January.
0949 am (0149GMT)
(Reporting By Al-Zaquan Amer Hamzah; email@example.com) Editing by Prateek Chatterjee
Keywords: MARKETS MALAYSIA STOCKSNEWS/CONSUMER