IMPENDING POLLS, INFLUX OF FOREIGN INVESTORS TO PROPEL MEDIA SECTOR

KUALA LUMPUR, Jan 19 (Bernama) -- The impending general election and influx of
foreign investors will propel the media sector this year albeit moderate
economic growth, says OSK Research Sdn Bhd.

As such, the research house has upgraded its recommendation for the media sector
from "neutral" to "overweight".

"Although the date of the general election remains a guessing game, we believe
in the run-up to the election, the incumbent government and the opposition
parties will progressively ramp up advertising across all media platforms to
promote their cause in preparation for the upcoming polls.

"As for the influx of foreign investors, we believe the sector provides a
cheaper proxy to the consumer sector given that generally the latter sector's
heavyweights are trading at high price earnings ratio of around 15 times to 20
times on 2011 earnings per share," it said in its equity note Tuesday.

As such, OSK Research said it believes that media stocks offer a strong
valuation proposition for investors seeking under-valued stocks that offer
exposure to strengthening consumer and business sentiments.

OSK Research expects advertising expenditure (Adex) growth this year to be at a
one time to 1.5 times multiple of its 5.8 per cent gross domestic product (GDP)
growth.

This translates into a 5.8 per cent to 8.7 per cent projected adex growth.

"However, given the prospect of an early general election this year, we don't
rule out the possibility of Adex growth exceeding two times multiple on GDP
growth this year.

"Judging from the impact of the last general election in the first half of 2008,
Adex grew 21.81 per cent or at a three times multiple of GDP growth," it said.

The Adex growth for last year increased 15.7 per cent year-on-year in line with
the improving economic landscape, better business sentiments and seasonal
factors.

OSK Research said the pressure of rising newsprint prices would ease slightly
for publishers and in turn enhance yield as the Ringgit was expected to remain
firm against the US Dollar at least for the first half of this year.
-- BERNAMA