KUALA LUMPUR (Jan 7): Kenanga IB Research has maintained its “Neutral” rating on the consumer sector, with a more negative bias on the sin sector.

In a note today, the research house said that consumer sentiment may recover in conjunction with the festive season and holidays, as well as behaviour normalisation by consumers three quarter post-GST implementation.

It said sales momentum was expected to continue until early 2016, with the Chinese New Year festivities just around the corner.

However, it opines that the commodity market will stay subdued assuming ample supply and slowing global demand.

It also said that exporters will continue to enjoy the advantage of the weak local currency.

The research house’s top pick is Oldtown Bhd (OP: RM1.76).

Meanwhile, for the sin sector, the research house views negatively, the latest round of excise duty hike (a raise of 42.9%) introduced in the tobacco sector, as it might accelerate the pace of the industry volume decline.

“Besides, we are also wary of further increase in excise duty, particularly in the brewery sector, which has been spared from excise duty hike for 10 years (last increase in 2005).”  

Kenanga IB Research’s top pick of the sector is Guinness Anchor Bhd (OP; RM15.36). It also favours Carlsberg Brewery (M) Holdings Bhd (OP; RM13.86), and upgraded British American Tobacco (M) Bhd (MP; RM57.78).