Inve$t | Market Sentiments | 15 September 2023
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According to the Securities Commission Malaysia (SC) chairman Datuk Seri Dr Awang Adek Hussin, the SC is planning to adopt the International Sustainability Standards Board’s (ISSB) global standards to ensure that sustainability becomes an integral part of local corporations. At the same time, the SC intends to customise the standard to align with local requirements. Malaysia is at a juncture in its development of domestic renewable energy sources as well as a carbon market, thus we cannot afford to fall short of the environmental, social and corporate governance (ESG) standards. In his opening address at the Business Foresight Forum 2023 on 13 September, he said that we should make full use of the available opportunities. He also lauded the launch of the centralised sustainability reporting platform for Malaysian firms to disclose their ESG data by Bursa Malaysia and the London Stock Exchange, saying that it was a positive move. The synergies and alignment between the shariah and ESG principles are naturally compatible. Malaysia is in a unique position to take the lead in sustainable finance by leveraging its expertise in the Islamic capital market (ICM). He said that our regulatory frameworks, such as the Sustainable and Responsible Investment (SRI) Sukuk Framework, SRI-Linked Sukuk Framework, and Waqf-Featured Fund Framework, reflect our commitment to both the sustainability and ICM agendas. He added that waqf is an innovative solution and social finance catalyst that aligns with this commitment to sustainable practices.
Consumer sector to remain resilient, driven by strong demand – MIDF
According to MIDF Research in a report on September 14, it remains positive on the outlook of the consumer sector, underpinned by resilient demand for staple-related products, and solid domestic consumption backed by a stable labour market. Robust retail trade, increased tourism activities, and better profit margins for food and beverages (F&B) producers, driven by declining global commodities prices also bodes well for the consumer sector. Normalising soybean meal and corn futures prices suggest lower raw material costs for poultry players, further supporting producers’ profit margins. The research house’s top picks are consumer staple-related companies that exhibit resilient demand. It has “buy” calls on QL Resources Bhd at a target price (TP) RM6.75, and Fraser & Neave Holdings Bhd (TP: RM33.50). It favours QL Resources, which is supported by consistent demand for marine and livestock products and F&N because the company is likely to benefit from the rising demand for ready-to-drink beverages, which is being fuelled by an increase in tourist traffic. Most global commodities futures for F&B producers remained below their two-year peak in August 2023. Key raw materials of food producers, such as wheat and crude palm oil (CPO), continued their downward trend during the same period. Looking ahead it foresees decreased raw material costs for food manufacturers due to the lowering of futures prices for key commodities, such as wheat and CPO. It cited the Department of Statistics Malaysia (DOSM) report on Sept 11 that Malaysia’s wholesale and retail trade recorded a sales value of RM139.8 billion in July 2023, up 7.2% year-on-year. This was primarily driven by increased consumer spending in non-specialised stores, F&B and tobacco, automotive fuel, and other goods.