2010 adex growth in Malaysia seen at 8-10pc

 

OSK Research projects advertising expenditure (adex) growth of between eight and 10 per cent for next year, driven by a recovering economy and several major events like the 2010 World Cup and 2010 Commonwealth Games.

The research firm said newpapers would remain the most popular advertising medium although television and radio''s share of adex will inch up further on strong growth compared with the marginal growth projected for the former.

"We believe the Malay market segment will continue to be the main growth driver for newspaper adex, led by Harian Metro, which has been enlarging its market share over the last few years," it said in a research note today.

Adex for first nine months of this year grew 3.4 per cent year-on-year to around RM4.7 billion from RM4.56 billion a year earlier.

Despite projecting a modest adex growth for 2010, OSK maintains a "neutral" call on the sector as there is still a risk that the recovery in the economy could be slower that expected.

"As our top picks, we prefer broadcasters such as Astro and Media Prima over the print media, due to the increasing relevance of and greater propensity for television advertising as well as radio, which happens to be one of the fastest growing segments for adex," it said.

OSK also expects a better outlook for the print media companies amid an economic recovery and recovering margins on easing newsprint prices, which have fallen from the peak reached in late last year, despite its preference for broadcasters.

The research firm prefers NSTP over Star in view of its leading position in terms of adex market share for newspapers as well as its exposure in the Malay segment, which offers greater growth potential compared to the English segment, which has been saturated and stagnant over the last few years. --Bernama