The latest Nielsen global survey of consumer confidence and spending released on Tue revealed that Singapore’s consumer confidence index fell seven points to 94 in 4Q15. A level below 100 indicates signs of pessimism. It was reported that there are locals switching to cheaper grocery brands, while some stated they would continue to reduce their discretionary spending even during better times.

While the data points on consumer confidence are not all encompassing, this data set is yet another indication of the muted sentiments. We believe Sheng Siong Group, whom is known to offer products at good value, remains resilient and can ride out the tough times. We have a BUY rating and fair value estimate of S$0.95 on the stock, which is also one of our top picks in the consumer sector.

Source: OCBC Research - 3 Feb 2016