KUALA LUMPUR: OSK Research see brighter days ahead for the consumer retail sector and its top pick is Parkson Holdings where it has a Buy with a target price of RM6.75.

It said on Friday, June 25 Malaysia retail sales remained resilient in 2009, growing 0.8% y-o-y while companies under its coverage generally outperformed the industry. In 1QCY10, these companies delivered positive revenue and earnings growth. More importantly, they performed better in Oct-Mar 10 versus Oct-Mar 08.

'Despite the proposed subsidy cuts, we believe that retail sales will continue to be strong fuelled by better sentiment and economic recovery. We are OVERWEIGHT on the retail sector.

'Besides the favorable outlook, the sector is one of the highest dividends yielding, which makes it a good pick in anticipation of a volatile 2H10,' it said.

OSK Research's top pick is Parkson Holdings (BUY, TP 6.75), which is poised to ride on the strong recovery in China?s domestic consumption and Zhulian (BUY, TP RM3.77), given its solid fundamentals compared to its peers, as well as its attractive dividend yield."