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Hot Sector – Which Consumer stocks to hold and trade?  

Thu 29 Nov 2018

The Star reported that the latest domestic business sentiment is expected to continue declining from October to December amid slower national economic growth and external vulnerabilities according to the latest outlook from Malaysian Institute of Economic Research (MIER).

However, MIER said that the domestic business conditions remained favourable despite the uncertainties on the near-term outlook in the fourth quarter.

MIER’s Business Conditions Index (BCI) in the third quarter of 2018 slipped 7.5 points quarter-on-quarter to 108.8 points, signalling slower growth ahead. As for the fourth quarter, MIER expect the BCI to fall further, but it will likely remain above the 100-point threshold of optimism.

On the consumer sentiment index, MIER was quoted as expecting it to be flattish in the fourth quarter. For context, the index dropped 25.4 points to 107.5 in the third quarter, but still remaining above the 100-point threshold of optimism.

The MIER projected the Malaysian economy to expand by 4.7% for full-year 2018, supported by domestic private consumption. Meanwhile, the government has projected a gross domestic product (GDP) growth of 4.9% for 2019.

However, analysts say that the GDP could “undershoot or overshoot” in 2019 largely due to external challenges. That said, on the domestic side, the government’s efforts to help minimize the tax burden on ordinary households and assist key businesses as well as address corruption and raise fiscal transparency are expected to pay large dividends.

Hence, it appears that domestic consumption will still be one of the more resilient sectors in the economy and select consumer stocks with good growth prospect will still be favoured by the market.

Which Consumer stocks should elite traders hold and trade in their portfolio?

We highlight the strong consumer stocks in today’s mPower Algorithm report and it seems that one has to pick the correct consumer stock to outperform.

Stock picking is key for the sector and consumer stocks.

However, for elite traders as usual, there are plenty of opportunities to trade the stocks in the sector as they move through their individual momentum cycle and price critical level and tracked by our Master Algorithm.

Consumer Stocks Outlook

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Note: Certain info presented in the tables above has been redacted to comply with the agreement with elite members of the mPower Algorithm program and mPower Trading program and certain institutional clients. The above analysis reflects our personal view only and is subject to terms of use. Please refer to the full report inside for the complete info.