Wednesday 28 September 2022

Appetite growing for SE Asia food stocks

Bangkok, May 12, 2010

Southeast Asian food makers are reporting a sharp rise in demand on the back of a recovering global economy and rising incomes, suggesting the region's food-related shares may have more room to climb.

From wealthy Singapore to the rapidly developing economies of Thailand, Indonesia, Malaysia and Vietnam, food operators are enjoying increasing sales and swelling margins, a trend analysts see lasting at least 3-5 years in some markets.

Food makers are benefiting from a rebound in Southeast Asia's export-sensitive economies that is spilling over into consumer confidence and spending. The Asian Development Bank expects the region to grow 7.4 per cent this year and 8.0 per cent next year - the third-strongest region in Asia after China and India.

'The sector, filled with many well-run companies, is investible in a very broad range of companies and also a broad range of industries,' said Ploenjai Jirajarus, a Bangkok-based analyst at a unit of Japan's largest brokerage, Nomura Holdings.

'They're going to see impressive growth thanks to a pickup in confidence and strong pent-up demand.'

Their allure is simple: many of the stocks are cheap, the fast-developing region of 568 million people offers plenty of demand for food, and Asia's emerging middle classes are beneficiaries of the nascent global economic recovery.

'Food is among the sectors where we're bullish,' said Kampol Jantavibool, a fund manager at SCB Asset Management Company, Thailand's largest fund house.

'Fundamentally, people are still finding comfort in the sector,' said Gabriel Yap, a Singapore-based senior dealing director at DMG & Partners Securities Pte Ltd.-Reuters

Tags: industry | manufacturing | Southeast Asia | Food stocks |

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