Nestle’s YTD gain alone could almost buy Manchester United FC

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KUALA LUMPUR (March 13): Nestle (Malaysia) Bhd’s strong rally continued as its share price rose by 4.19% or RM6.30 to RM156.80 with about 72,400 shares traded, giving it a market capitalisation of about RM36.8 billion.

Other blue-chip counters that continue to see positive uptrend include Dutch Lady Milk Industries Bhd which has gained by RM2.60 or 3.84% to RM70.30, with about 22,700 shares traded. Fraser & Neave Holdings Bhd also jumped by 4.10% or RM1.30 to RM33, with about 71,000 shares traded.

In contrast, the FBM KLCI is in the red, slightly lower by 0.03% or 0.62 points to 1,860.6 as of writing.

For Nestle, it represents a gain of about 51.9% year-to-date and its market cap has grown by almost RM12.6 billion, the total market capitalisation of Manchester United Plc (US$3.23 billion), the most expensive English football club which is listed on the New York exchange.

Year-to-date, Dutch Lady has gained by about 14.5%, while F&N has also jumped by about 22.4%.

According to Rakuten Trade Sdn Bhd’s vice president of research Vincent Lau, the strong rally in the blue-chip counters such as Nestle, Dutch Lady and F&N is a reflection of the confidence that foreign investors have in the country’s economic fundamentals and outlook, moving forward.

Out of the 48 trading days so far in 2018, Nestle has seen 37 days of positive moment in its share price, 7 negative and only 4 days where it remained unchanged. 

As for Dutch Lady, there are 29 days of upward movement in its share price, 13 negatives and 6 unchanged, while F&N saw 30 days of positive movement, 11 negative and 7 days unchanged.

This indicates there are about 60% to 77% chances for traders to buy and gain from buying these counters.

At current level, Nestle is trading at a trailing P/E of 57 times, with an indicated dividend yield of about 1.8%.