Indonesia's FMCG Sector Retains Bull on Govt Allocation to 'Grassroots' — Market Talk

Indonesia's fast-moving consumer goods sector is still bullish for Nomura on more money flow to the country's "grassroots", Heng Siong Kong says in a research report. The analyst cites three government programs--free meals, village cooperative, and agriculture programs, where around 90% of the budget allocation goes to lower-tier cities and rural areas. The FMCG sector will likely be the main beneficiary to capture potential higher demand. Also, potentially higher inflation stemming from the Middle East conflict can be buffered by stimulus from these programs. Nomura prefers companies with potential strong sales performance to offset margin erosion. Its top sector pick is buy-rated Ultrajaya Milk Industry. (ronnie.harui@wsj.com)