In a research note today, OSK said the coming Hari Raya Aidil Fitri festive season will spur the advertising expenditure (adex), especially for television.
It said adex grew by 20% quarter-on-quarter and by a marginal two percent year-on-year to RM2.1 billion, it said.
“We deem the increase within forecast, thanks to the adex-friendly Euro 2012 in June and the fact that advertisers had started to spend compared with the first quarter of this year,” it said.
The research house said the general election, expected to be held in the second half of this year, will also contribute to the positive stance.
“We see the sector benefiting from political campaigns in the run-up to the general election, coupled with strong advertising and promotion spending from food and beverage, banking, insurance and telecommunication companies during the 2012 Olympics and Hari Raya,” it said.
OSK has maintained its “overweight” call on the media sector with its top picks – Media Prima and Media Chinese International Ltd.
It liked Media Prima Bhd, being Malaysia’s largest integrated media player and a free-to-air TV leader with strong media businesses led by Harian Metro and Berita Harian.
It recommended a “buy” call on the stock at fair value (FV) of RM2.98.
The research firm said it was less keen on Star Publications (M) Bhd. It recommended a “neutral” call on the stock at FV of RM3.46 as the paper faced a circulation decline.
OSK recommeded a “buy” call on Media Chinese at FV of RM1.86.
“The company is recommended for its prudent cost controls and the huge underlying potential of its publications in view of the growing Chinese-literate population as well as the increasing importance of the language in the global arena,” it said.