Consumer stocks at risk as ASEAN retail sales crumble

Headwinds will escalate as currencies slide.

ASEAN consumer confidence is bearing the brunt of economic headwinds plaguing the region. As sales tumble and currencies drop, listed consumer players will struggle to boost their flagging share prices. 

According to CIMB, counters which will be impacted by the ASEAN consumer slowdown will include Petra Foods, Japfa, and Super Group.

Petra and Japfa will struggle with weak sales in their core market of Indonesia. The region’s largest economy is not expected to get any respite from soft commodity prices and its weak currency.

Other players such as Super Group are impacted by the strong greenback. CIMB said that Super will have difficulty passing on higher costs to its consumers, while escalating competition will further erode its margins.

“We remain bearish on the sectors as gaming and consumer are littered with disappointments. With share prices of consumer staples that deliver (existing top pick Sheng Siong) having done well, choices are limited,” CIMB said.