Reuters: Hot Stocks: STOCKS NEWS INDONESIA-Consumer goods sector set for slow growth - S&P

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STOCKS NEWS INDONESIA-Consumer goods sector set for slow growth - S&P Aug 1st 2012, 05:32 Wed Aug 1, 2012 1:32am EDT Indonesian consumer goods companies are likely to see growth slowing down over the next three years due to lower revenue growth and slower improvements in profitability, Standard & Poor's said in a report on Wednesday. Good economic growth prospects, moderately lower inflation risk and rising disposable incomes in Southeast Asia's biggest economy are likely to support growth in the consumer goods sector, according to the report. The report, however, says the pace of growth has slowed down over the past two years. "Relentless capacity expansion and increasing competitive pressure could reduce the ability of market participants to raise prices if raw material prices increase. This will affect margins," said S&P credit analyst Xavier Jean. "Capacity expansion to defend market share could also lower free operating cash flows for rapidly growing companies and moderate any improvement in credit quality." The report is based on a review of the financial performance of the largest 25 listed Indonesian companies in the branded consumer nondurables, retailing, and animal feed, breeding and farming subsectors. By 12:02am (0502 GMT), the Jakarta Consumer Index was down 2.11 percent, the biggest drop across sectors, while the broader Jakarta Composite Index was down 0.66 percent. 1202 (0502 GMT) (Reporting by Andjarsari Paramaditha in Jakarta) Link this Share this Digg this Email Reprints

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