FW: AmBank Research - BUDGET 2018, 27 Oct 2017

 

 

BUDGET 2018

The newly-announced Budget 2018, in our opinion, is rakyat- and business-friendly, comprehensive, with plenty of goodies for the needy, while maintaining fiscal prudence.

 

From the equity market standpoint, among the "budget-sensitive" sectors, the Budget 2018 appears to have more profound impact on construction (via the rollout of projects), consumer (via lower taxes and cash handouts), small and medium enterprises (SMEs) (via government-guaranteed/soft loans and grants), and manufacturing (via matching grants and tax incentives for smart facilities and automation) sectors.

 

Among the benefits the low-income group will enjoy are: (1) a two percentage point cut in income tax rate (for the taxable income between RM20,000 and RM70,000); (2) the extension of the BR1M payout of up to RM1,200 per household; (3) one-off special payments of RM750 to government retirees, and RM1,500 to all civil servants and village heads.

 

On the other hand, the budget has only a limited impact on private property developers (via the extension of the PR1MA stepped-up financing scheme to non-PR1MA private housing projects). To promote home ownership for the low-income group, Budget 2018 continues to focus on various government-backed affordable housing schemes such as Projek Perumahan Rakyat, Rumah Mesra Rakyat, PR1MA and PPA1M. 

 

With no major surprises from Budget 2018, we maintain our end-2017 KLCI target of 1,745pts and end-2018 KLCI target of 1,900pts, based on 17.5x 2017F and 2018F earnings. Our top BUYs are Tenaga Nasional, Public Bank, RHB Bank, Gamuda, Sunway, Bermaz Auto, Prestariang, Kimlun, Luxchem and Berjaya Food.

 

 

ECONOMIC HIGHLIGHT

Malaysia – Budget 2018:  More redistributive than expansionary

 

 

DISCLAIMER:

The information and opinions in this report were prepared by AmInvestment Bank Bhd. The investments discussed or recommended in this report may not be suitable for all investors. This report has been prepared for information purposes only and is not an offer to sell or a solicitation to buy any securities. The directors and employees of AmInvestment Bank Bhd. Bhd may from time to time have a position in or with the securities mentioned herein. Members of the AmBank Group Bhd and their affiliates may provide services to any company and affiliates of such companies whose securities are mentioned herein. The information herein was obtained or derived from sources that we believe are reliable, but while all reasonable care has been taken to ensure that stated facts are accurate and opinions fair and reasonable, we do not represent that it is accurate or complete and it should not be relied upon as such. No liability can be accepted for any loss that may arise from the use of this report. All opinions and estimates included in this report constitute our judgment as of this date and are subject to change without notice.

 

 

 

 

 

 

 

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