November’s distributive trade rose 9.0% y/y largely supported by a solid above 9% growth for the fifth consecutive month from wholesale trade, which climbed 9.6% y/y while retail sales maintained its doubledigit growth in November, up 10.5% y/y. Furthermore, motor vehicle sales improved in November by 2.5% y/y with the distributive trade expanded by 9.0%y/y. Better consumer confidence added with stable wage growth and stabilising inflation led to a more stable household disposable income. Also, the stronger Malaysian ringgit (MYR) helped eased import cost and the operating cost of the businesses. We expect distributive trade sales to remain favourable in the near term supported by the festive season i.e. Christmas and Chinese New Year, tourism and also healthy trade and manufacturing data which translate into positive employment and wage growth. This segment of the business activities is poised to remain robust in 2018, benefitting domestic spending.

• November’s distributive trade rose 9.0% y/y from 8.8% y/y in October, largely supported by a solid above 9% growth for the fifth consecutive month from wholesale trade. In November, this segment of the trade grew 9.6% y/y from 9.4% y/y in October.

• Besides, retail sales maintained its double-digit growth in November, up 10.5% y/y from 10.7% y/y in October. Furthermore, we found motor vehicle sales improved in November by 2.5% y/y from 1.4% y/y in October. Distributive trade expanded by 9.0% y/y in November from 8.8% y/y in October.

• Better consumer confidence added with stable wage growth and stabilising inflation led to a more stable household disposable income. Besides, the stronger Malaysian ringgit (MYR) helped eased import cost and the operating cost of the businesses.

• We expect distributive trade sales to remain favourable in the near term supported by the festive season i.e. Christmas and Chinese New Year as well as from the tourism industry. Adding on, healthy trade and manufacturing data translates into positive employment and wage growth in the manufacturing sector, which went up 2.3% y/y and 9.2% y/y respectively in November. We expect this segment of the business activities to remain robust in 2018, benefitting from domestic spending.

Source: AmInvest Research - 15 Jan 2018