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Consumer goods stocks worst performers in 2019
Despite being deemed a resilient sector by market players because people always buy consumer goods regardless of the economic situation, the price index of those stock declined by 20.92 percent year-to-date (ytd) as of Dec. 18
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Mom-and-pop shop selling consumer goods in Padang, West Sumatra. (Shutterstock/-)
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any share prices on the Indonesia Stock Exchange (IDX) declined this year, but consumer goods stocks suffered the most and became the worst performers.
Despite being deemed a resilient sector by market players because people always buy consumer goods regardless of the economic situation, the price index of those stock declined by 20.92 percent year-to-date (ytd) as of Dec. 18.
The decline was the largest among all other sectors that recorded declines throughout this year, such as mining, miscellaneous industry, manufacturing, agriculture and trade and the service and investment sectors.
The sharp decline of prices in the consumer goods sector was mainly caused by a fall in the prices of large-cap consumer goods stocks, which contributed a big weighting on the stock price index.
Consumer goods giant PT Unilever Indonesia’s share price, for example, declined by 9.86 percent ytd as it recorded a weak performance throughout the first nine months of this year. Although the company booked a 2.63-percent year-on-year (yoy) increase in total revenue to Rp 32.36 trillion (US$2.31 billion), its profits fell by 18.47 percent yoy to Rp 5.4 trillion.
In the meantime, the government’s decision to hike tobacco excise by 23 percent on average and retail prices by 35 percent made a negative impact on cigarette stocks as the share prices of a major cigarette producer, PT HM Sampoerna, nosedived by 44.2 percent ytd, while the share prices of another, PT Gudang Garam, plummeted by 37.34 percent ytd.
The fall in such blue chip shares not only affected the sector’s price index but the Jakarta Composite Index’s (JCI) performance as well. The heavy weightings of these stocks caused the IDX’s main gauge to record a “stagnant” growth of 1.5 percent ytd.
