KUALA LUMPUR: MIDF Research is optimistic about the consumer sector following the recent Budget 2025 which is crafted to bolster household income and sustain consumer spending via comprehensive measures.

MIDF said key initiatives include increasing cash aid via Sumbangan Tunai Rahmah, raising the minimum wage from RM1,500 to RM1,700 in February 2025 and providing targeted subsidies for RON95 petrol to keep prices stable for about 85 per cent of Malaysians.

"Overall, we remain optimistic about the consumer sector, supported by a stable labour market that continues to drive domestic consumption, buoyed by favourable private consumption and gross domestic product (GDP) growth," MIDF said in a note today.

The report said declining commodity prices and a stronger ringgit will improve food and beverage producers' margins, further enhancing the sector's outlook, the report said.

It has a "Buy" call for top picks F&N and AEON with target prices of RM37.00 and RM1.67, respectively.

A rise in out-of-home consumption and its new integrated dairy farming business set to boost F&N's revenue, MIDF said.

As for AEON, strong local demand for essential goods and its property management services, thanks to improved rental renewal rates, will help the group thrive.