End of bear market rally draws nigh

End of bear market rally draws nigh, says Ambrose

KUALA LUMPUR: The food and beverage (F&B) and consumer product sectors have shown no signs of slowing down and will lend support to the local stock market at the end of a bear market rally, said Aberdeen Asset Management Sdn Bhd managing director Gerald Ambrose.

“Companies like Nestle, F&N, Guinness and BAT have an export angle but we are not seeing a slowdown in sales for these companies,” Ambrose told The Edge Financial Daily on the sidelines of the 23rd Asia-Pacific roundtable organised by Asean ISIS and ISIS Malaysia here on Tuesday.

“Spending within the domestic consumer market will hold banks up,” he said, adding that Malaysian banks had not been affected by the toxic debts in US and European banks. “Banks appear to be still willing to lend and Bank Negara has made it its priority to ensure that credit is still available.”

Ambrose added that if consumers were willing to face risks or suffer temporary losses, investments in the property development sector also held promise for further improvement.

“We’ve come this far without facing massive asset price appreciation, so we’re doing all right,” he said.

Ambrose said while Malaysia was experiencing a decline in exports, the economic conditions could have been worse. For instance, he said an increase in petrol and diesel prices would have a greater impact on the broader Malaysian society.

“The economy may have contracted 6.2% in 1Q09 but traffic along the North-South Expressway was up 3.5%, so I don’t think Malaysians are feeling that bad,” he said.

“My personal view is that we are nearer to the end of a bear market rally than the beginning and it won’t go on for much longer,” Ambrose said, reflecting on his stance in defensive sectors such as the F&B and consumer product.

http://www.theedgemalaysia.com/business-news/15643-end-of-bear-market-rally-draws-nigh-says-ambrose.html