This implies its lowest level since 2QCY21, back when Malaysia entered a new pandemic lockdown phase. On the same note, MIER’s Consumer Sentiment Index sustained its downtrend in 3QCY23, via a sequential decline of 11.9 points to 78.9. Evidently, MIER’s Business Conditions Index fell by 2.7 points to 79.7 in 3QCY23 (2QCY23: 82.4, 3QCY22: 99.8) – which translates to its lowest level since 2QCY20 during the onset of the pandemic. This is due to the following reasons: (i) inflationary pressures eroding spending power, and (ii) reduction in export orders amidst rising operating costs. Based on the studies, Malaysian consumers and businesses have turned more pessimistic in 3QCY23. Our views are corroborated by recent studies conducted by the Malaysian Institute of Economic Research (MIER) that were revealed last month. This is attributed to sustained weak sentiment for both consumers and enterprises. We introduce our CY24 adex forecast of 0.4% contraction (CY23F: 0.5% contraction), underpinned by expectation that advertisers will remain prudent on marketing activities. Our sole OP recommendation for the sector is STAR (OP TP: RM0.52).Īnaemic outlook for adex. We also introduce our CY24 adex projection of a 0.4% contraction on the back of pessimistic outlook from Malaysian consumers and businesses due to inflationary pressures, reduction in export orders, and rising operating costs. We downgrade our sector recommendation to UNDERWEIGHT (from NEUTRAL) on the media sector due to: (i) continued slump in adex market share for traditional media, (ii) sustained cord cutting trends, and (iii) advertisers maintaining their tight grip on marketing budgets awaiting sentiment rebound.
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