Consumer Sector

2010 proved to be a decent year for OSK’s Small Cap Jewels although their performance was eclipsed by the liquidity-infused rally, which benefited the bigger caps, particularly from 2H2010.

Of the 50 stocks profiled in handbook, half posted absolute returns in excess of 20%, with 49% outperforming the FBM Small Cap and FBM KLCI indices.

While the smaller caps are expected to bask in the glory their larger cap peers in 2011, investors should not ignore names with good longer term potential that are trading at attractive valuations.

OSK like small caps in the construction, property, oil & gas and consumer sectors as beneficiaries of the ETP, elections and earnings themes.

The table below are the 2010 performance of OSK Top 50 Small Jewels and performance since OSK’s Small Cap Jewels report released in April 2010.

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consumer-retail

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. Our top pick is Parkson Holdings (PHB) (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.

Below are the target price for consumer product sector.

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