Malaysia's adex growth to remain bullish this year

Publication: NST

Date of publication: Apr 30, 2014

Section heading: Business Times

Page number: 004

RHB Research says Malaysia's gross advertising expenditure (adex) saw a kickstart in the first quarter and should remain bullish this year.

"We continue to believe that an eventful year like 2014 will augur well for adex growth, with FIFA World Cup 2014 being a positive catalyst," said the research house.

But the positive catalyst may be mitigated by the higher cost of living, coupled with advertisers being more cautious on spending ahead of the implementation of goods and services tax (GST) in April 2015.

Moreover, the alternative media platform such as Internet-based advertisements may dilute the adex figures for traditional platforms, thus warranting the research house's "neutral" view on the sector.

"We like Media Prima Bhd for its solid financial position and attractive dividend yields. Catcha Media Bhd is expected to report a healthier set of results this financial year. As with Astro Malaysia Holdings Bhd, its valuation remains lofty. Meanwhile, Media Chinese International Ltd still lacks a strong growth catalyst that will propel earnings," RHB Research said yesterday.

The firm said Malaysia's total gross adex grew by 14.7 per cent in the first quarter of 2014 with most media registering growth, except for radio and point-of-sale, which reported a slight decline. Pay TV continued to grow strongly to capture larger market shares.

However, Media Prima Bhd's channels still reported healthy growth in adex for the first quarter of this year.

Among the newspapers, the English papers charted the strongest growth in adex revenue, followed by Malay papers. However, Chinese newspapers' adex declined.

"Pay TV charted the strongest growth of 29 per cent, followed by newspapers (nine percent) and free-to-air or FTA TV (eight per cent). If we were to exclude Pay TV's adex, the growth would be 7.9 per cent.