"Consumer spending is expected to be better this year," OSK Research analyst Eing Kar Mei said, adding the sector performed very well last year even when the economy was hit by the United States financial crisis.
"Their average earnings growth was 10-20 per cent," she said at a press conference in Kuala Lumpur today in conjunction with the release of OSK Research's sixth edition of the "50 Top Malaysian Small Cap Companies" publication.
Out of the 50 top Malaysian small companies listed by OSK Research, 11 stocks were consumer and related stocks, said its Deputy Head of Research, Jeffry Tan.
OSK's consumer stock picks are C.I Holdings, Hai-O Enterprise, Kawan Food, Kian Joo Can Factory, Mamee-Double Decker, Multi Sports Holdings, NTPM Holdings, Padini Holdings, Pelikan International, QL Resources and Zhulian.
Meanwhile, OSK Research Head Chris Eng said a stronger Ringgit would also help boost consumer stocks especially those involved in the import sector.
Other good picks, besides the consumer sector, are healthcare and banking within the next six to one year, "while banking, construction and Sarawak-related stocks are also good picks for the next three months," he said.
The oil and gas sector is also expected to receive some limelight as two units of Petronas will be listed within the year.
He said while the market was expected to remain choppy and volatile for now, business would be back to usual from the tail-end of the third quarter and towards 2011.
Eng also said for now, the euro-zone crisis was still grabbing headlines but sooner or later this would change and people would start pricing in some positive factors for the market and start buying.
OSK's is pegging the market fair value for 2010 at 1,345 points and 2011's fair value at 1,580 points but that would depend very much on when the 13th General Election will be held.
BERNAMA
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