In view of the near-term volatility and longer term potential repercussions from Brexit, we highlight Sheng Siong Group as our preferred pick in the consumer sector. We recommend the stock due to several reasons. It is relatively defensive as a consumer staples company, and with its current earnings solely exposed to Singapore, there should not be material immediate implications.

While SSG’s first store in China is slated to open around 4Q16, we do not expect significant changes to its earnings profile in the near term. We believe the stock still retains stability in its market share and margins, and with a ~4% dividend yield, we reiterate our BUY rating, with fair value estimate of S$0.95 unchanged.

Source: OCBC Research - 28 Jun 2016