Strong Distributive Trade Sales Hinted Robust 3QCY22 GDP Growth

Strong Distributive Trade Sales Hinted Robust 3QCY22 GDP Growth
Photo by Andres Canavesi / Unsplash

Malaysia’s distributive trade sales growth continued on double-digit expansion rate for 5-consecutive months, with more than 23.9% yoy in Sep-22 and 32.7% yoy in the third quarter of 2022, reaching a new peak point.

By component, retail spending expanded strongly by over 30% yoy, wholesale trade up by more than 13.3% yoy and motor vehicles sales by over 51% yoy.

Total passenger movements surpassed 5 million. Prior to international borders reopening in Apr-22, total passenger movements hardly surpassed 3 million mark due to the Covid-19 pandemic and the subsequent lockdowns.

However, latest figure in Sep-22 saw the passenger movements registered at 5.3 million, approximately 63.7% of Sep-19 levels.

Retail trade growth forecast

Malaysia’s consumer spending is expanding strongly as reflected in retail trade sales growth of over 23.9%yoy in 9MCY22.

"Looking at the macro outlook and improving fundamentals, we project retail trade growth to above 17.6% for this year.

"We believe the pent-up demand will continue until end of this year underpin by improving labour market, stable inflationary pressure and domestic economy reopening," says MIDF.

Lookout for Banks and Telcos Stocks
or today, we reckon the local bourse to maintain its rebound following a sell-down in end-October thus expect the index to trend between the 1,440-1,455 range with buying to focus on the Banks and Telcos