Malaysia’s distributive trade sales to slow down from surge in Covid-19 cases
KUALA LUMPUR: Malaysia’s 2020 distributive trade sales forecast has been slashed by analysts to 5.5 per cent to 4.5 per cent decline, reflecting greater downside risks arising from the third wave of Covid-19 infections.
The research arm of Kenanga Investment Bank Bhd (Kenanga Research) recapped that distributive trade sales remained on a recovery path in August at 2.3 per cent, charting the smallest contraction in six months.
“Sales value rose to above prepandemic level of RM111.4 billion, from RM109 billion in February, as more businesses reopened and consumers resumed purchasing activities during the Recovery Movement Control Order (RMCO) phase,” Kenanga Research said on Malaysia’s distributive trade in August.
“Month on month (m-o-m), 2.5 per cent and 5.6 per cent in July, growth softened to a fourmonth low on dissipating pent-up demand.”
Meanwhile, Kenanga Research gathered that improvement in retail and wholesale trade performance outweighed softer growth in motor vehicles sales.
The research arm highlighted that retail trade recorded the smallest decline in six months, at 1.5 per cent, due to increased sales at non-specialised stores.
As for wholesale trade, contraction narrowed further to -3.9 per cent, largely on a lessened fall in sales of other specialised items.
Motor vehicles (one per cent) moderated on a softer growth in motor vehicles sales (3.1 per cent), albeit remaining relatively high as consumers continued to take advantage of the tax holiday.
As such, Kenanga Research’s 2020 distributive trade sales forecast was slashed to -5.5 per cent to -4.5 per cent (from the previous forecast of -2.5 per cent to -1.5 per cent; -8.6 per cent for year to date; and 5.9 per cent for 2019), reflecting greater downside risks arising from the third wave of Covid-19 infections.
“The projected recovery in distributive trade sales is partly slowed by the flare-up in Covid19 infections, resulting in the reinstatement of Conditional MCO (CMCO) and Targeted Enhanced MCO (TEMCO) in affected areas, weighing on sentiment and hindering consumer activities.