Maybank: Budget 2016 a relatively defensive one; not much for banking sector

by **Cals** Tue 27 Oct 2015, 00:05

Budget 2016

[size=28]Maybank: Budget 2016 a relatively defensive one; not much for banking sector[/size]

By Yimie Yong / theedgemarkets.com | October 24, 2015 : 1:22 AM MYT

KUALA LUMPUR (Oct 23): [size=16]Malayan Banking Bhd (Maybank) ([You must be registered and logged in to see this image.] Valuation: 2.25, Fundamental: 1.40) said Budget 2016 is a relatively-defensive budget and there is not much for the financial services and banking industry.

“All in all, it is a relatively defensive budget, and one that is required to deal with the challenges that we are facing," Maybank group president and chief executive officer of Datuk Abdul Farid Alias said in a statement today.

“Because we don't have much room to play, it is important that every ringgit we spend, it must be allocated efficiently, and spent effectively for results,” he added.

Although there isn’t much for the financial services and banking industry in Budget 2016, Abdul Farid said the banking group looks forward to more initiatives for the sector that the prime minister promised in his budget speech today.

“In Budget 2016, we are confronted with a challenging environment as the global economy struggles to find growth while anticipating an escalating interest rate regime, volatile financial and commodities markets and a changing demographics,” he noted.

To top it off, Abdul Farid said the government has to stay committed to budgetary discipline.

“It is absolutely critical to ensure the country’s current investment grade sovereign credit rating and the accompanying ‘stable’ outlook can be sustained to avoid further negative impact on sentiments,” he added.

However, he said a slight reduction in budget deficit to 3.1% of gross domestic product (GDP) in 2016 from 3.2% this year is understandable, given the macro background as the government has to balance the needs of various “stakeholders”.

Meanwhile, Abdul Farid also noted that the budget rightfully addressed the escalating cost of living that directly affects the middle and low income groups, by adding more basic food and medicines to be zero-rated and exempted under goods and services tax (GST); raising Bantuan Rakyat 1Malaysia (BR1M), minimum wage and civil service starting pay and minimum pension; increasing several personal income tax allowances that have not changed for many years, and building affordable housing.

“Measures are also not about ‘giving’ but ‘empowering’ to improve their livelihoods and prospects via entrepreneurships and access to education and training,” he pointed out.
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