Construction and Islamic finance-related stocks may be among the biggest beneficiaries on the local bourse moving forward as the government unveils its plan in Budget 2014 on Friday.
Affin Investment Bank Vice-President and Head of Retail Research Dr Nazri Khan said construction counters, especially those with low content and high multiplier project owner, would likely benefit.
He said higher multiplier projects such as the Mass Rapid Transit (MRT) circle Line 2 and Line 3 and Southern Double Tracking as well as the proposed Kuching-Kota Kinabalu Pan Borneo Highway may kick-start.
However, big ticket high import items like Kuala Lumpur-Singapore High Speed Rail and third interchange linking Johor and Singapore could face a delay, he told Bernama.
As the government focuses on Islamic finance and takaful industry, industry players may get added incentives next year to encourage bigger market share and provide more protection among Malaysians, Nazri Khan said.
“Stocks going big into Takaful such as Takaful Malaysia, Allianz and MAA may benefit,” he said.
The government may also launch a National Healthcare Project in the upcoming Budget that would provide every Malaysian with access to quality healthcare, he said.
“Healthcare stocks such as IHH Healthcare, KPJ Healthcare and TMC Life Sciences should benefit. Further, using Budget 2013 trend, Budget 2014 should again promote local tourism sector which means healthcare sector via medical tourism again will benefit,” he added.
Generally, Budget 2014 should spur local market sentiments by introducing tough measures to boost trade competitiveness, improve fiscal credibility, address the recent downgrade by sovereign credit rating and encourage stronger private sector participation to boost economic growth.
Also, the upcoming budget would likely focus on the implementation of subsidy rationalisation programme, the implementation of goods and services tax (GST) and extension of BR1M for the low-income earners.
He also said banks and properties could be mildly affected as the government may continue with the properties-cool-down and bad-debt-measures involving houses, properties, automotive and personal loans.
Softer retail or corporate loans are therefore expected due to higher stamp duty, foreign cap, tougher RPGT (real properties gains tax) and higher loan-to-value (LTV) ratio for property purchases and shorter personal financing tenure, he added.
Nazri said assuming big positive impacts on key beneficiaries and minimal negative impacts on other sectors (likely losers banking and properties stocks), FTSE Bursa Malaysia (FBM KLCI) should trend towards a range of between 1,800 and 1,820 points before the budget presentation.
— BERNAMA
*This article was published by Bernama. Read the original article here.
