Bursa Malaysia Stock Exchange Sector Performance 2011
Above: Performance by Sector (click to enlarge)
Consumer sector took the lead, supported by its ‘recession-resistance’ attribute. The Consumer Index was the top performer and the sole gainer among all the indices after having registered a gain of 1.5% in 2011. It is not at all surprising that the Consumer sector managed to outperform all the other sectors due to its well-known ‘recession-resistance’ attribute. During a period of heightened economic uncertainties, investors generally put more faith in companies with are expected to be least subjected to the cyclicality of the economy. We have a Neutral recommendation on the Consumer sector.
Technology Index…the biggest loser. The Technology Index recorded the worst performance of
-26.1% in 2011. That makes it two successive years at the chart bottom. Nonetheless we reiterate our view that the semiconductor sub-sector is expected to outperform its broader sector as we believe that the growth in tablets will have a positive impact on the semiconductor industry. We have a Neutral recommendation on the Semiconductor sector.
Construction Index…the second biggest loser. The Construction Index recorded the second worst performance amongst all local indices with a loss of 16.1% in 2011. The cyclical nature of
the Construction sector exposes it to the possible deceleration in the economy. The slew of already announced and on-going ETP-related projects may nevertheless provide a downside buffer to the Construction sector. However we expect a slowdown in the property-related construction activities as well as stiffer competition for jobs among construction companies that may directly impact overall margins going forward. We have a Neutral recommendation on the Construction sector.
by MIDF
