Top Malaysian fund shuns consumer companies

Kuala Lumpur

MALAYSIA'S top-performing equity fund manager has been trimming holdings of consumer companies on concern the country's new consumption tax will fuel a decline in household spending.

The slump in consumer purchases will probably last another two quarters after data last week showed retail sales contracted for the first time in almost six years in the final three months of 2014, according to Eastspring Investments, whose small-cap fund beat more than 700 Malaysian funds with returns of 31 per cent annually in the past three years. The 6 per cent tax on goods and services will take effect on Wednesday after the government announced it in 2013.