KUALA LUMPUR (Dec 3): Calling it an encouraging and decent quarter, analysts say the third quarter earnings of Bursa Malaysia-listed companies managed to maintain their growth momentum as business activities continued apace.

Of the 169 companies that have a market capitalisation of at least RM1 billion, 116 or 68.6% recorded a year-on-year (y-o-y) increase in their latest quarterly results, while 97 or 57.4% saw a quarter-on-quarter (q-o-q) rise.

According to MIDF Research, the aggregate reported quarterly earnings of the FBM KLCI’s 30 constituents improved 2.5% q-o-q and 7% y-o-y to RM15.8 billion for the quarter under review. On an adjusted basis, the aggregate normalised earnings grew 4.8% q-o-q and 4.2% y-o-y to RM17 billion.

Malacca Securities head of research Loui Low also highlights surprises in the consumer segment despite the high feedstock costs. Poultry companies, for example, raked in decent earnings, with some more than decent.

While corporate earnings may see a q-o-q moderation in the last quarter of the year in anticipation of the easing of pent-up demand, the growth could be sustained by factors such as the anticipated reopening of China’s borders, a slower pace of rate hikes by the US Federal Reserve and moderating inflation.

In an accompanying story, analysts point out that businesses that rely heavily on raw materials may get some reprieve as prices moderate. This will, in turn, bring down the cost of doing business. Judging from the financial results and forward-looking statements from companies, the market could expect some easing of inflationary pressures.

However, this could be offset by the impact of the higher minimum wage of RM1,500, from RM1,200 previously.

Read more about it in The Edge Malaysia weekly’s Dec 5 edition.

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