Budget 2014 should be bullish for stock market, says Affin Investment

by **hlk** Sat 02 Nov 2013, 15:37

Business & Markets 2013
Written by Bernama
Friday, 01 November 2013 20:21
A + A - Reset
KUALA LUMPUR (Nov 1): The Budget 2014 should overall prove bullish for the
stock market, Affin Investment Bank Vice-President/Head of Retail Research,
Dr Nazri Khan said.
He said it will push through unpopular reforms to help avoid a ratings
downgrade, inspire investor confidence, and reduce the debt/deficit, while
maintaining a caring stance.
"Given this, it should provide prospects for both the ringgit and the FTSE Bursa
Malaysia KLCI (FBM KLCI) to go up over the medium term.
"Affin's official target is 1900 points for the FBM KLCI and 3.0000 for the ringgit
to the greenback," he said in a statement today.
Nazri said the investment bank had listed 20 budget-linked stocks or warrants
for investors to buy, and among them are Bursa Malaysia, Tenaga Nasional,
YTL Power, Gas Malaysia, Globetronics, Maxis and Malaysia Airports.
He also said that there were five negative surprises in the Budget 2014.
Among these were, the 1Malaysia People's Aid (BR1M) being significantly
lower than expected at RM650 instead of RM1200, the goods and services tax
(GST) higher at six per cent, instead of four, and the real properties gains tax
(RPGT) set at double the rates of 15-30 per cent compared to last year.
"However, against this backdrop there were also five positive surprises in the
budget presentation.
"Among these are individual income tax rates being reduced by one to three per
cent for all tax payers, more tax incentives for private investment (mostly from oil and gas) and increased allocation or incentives to spur
innovation and productivity of small and medium enterprises," Nazri added.
He said, overall the Budget 2014 was relatively tough and bold to drive fiscal discipline and tax reforms.
"It is meant for middle class Malaysians based on changes in the tax bracket/incentives, while being a good attempt to improve the public
finance and Malaysia's sovereign ratings," he added. --BERNAMA