| | | | FEATURED
CALLS | | Malaysia | Budget 2018
Market-positive budget
Chew Hann Wong | | | | | | | Malaysia | Budget 2018
A budget for now and the future
Suhaimi Ilias | | | | | | | |
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| | | | | MACRO RESEARCH | | | | | | | Market-positive budget
by Chew Hann Wong |
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| | | | | | Budget 2018 is inclusive with many measures providing support to consumer demand and commitments for major infrastructure projects are reiterated for the LT. Other positives include a concerted effort to lift tourist arrivals with 2020 declared as Visit Malaysia Year. Budget 2018 is POSITIVE, especially for Consumer, Construction & Tourism. Our earnings forecast, sector weights and stock calls are unchanged. Maintain our end-2017 KLCI target of 1,800 and introduce end-2018 target of 1,865. | |
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| | | | | | | | A budget for now and the future
by Suhaimi Ilias |
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| | | | | | Budget 2018 balances between maintaining fiscal discipline; addressing current socio-economic issues such as cost of living, affordable housing, equality and inclusivity; as well as preparing economy, businesses and people for the future. | |
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| | | | | | | | S&P 500 & MSCI AC ASEAN Index – Risk Appetite Still On
by Nik Ihsan Raja Abdullah |
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| | | | | | The SPX 500 index (SPX Index) extended its rally from Aug 2017 low of 2,425. Friday's gap-up further lifted the index above its previous resistance of 2,578. Although the Leading Index (LEI CHNG Index) has turned negative for the first time since Sep 2016, the technical reading for SPX Index remains positive, reflected by an uptick in RSI. The breakout above its upper Bollinger band also implies greater volatility ahead. For now, we peg the upper resistance at 2,610 and 2,650. | |
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| | NEWS | | | Outside Malaysia:
China: Early data show investors more confident than real economy. The earliest gauges of China's economic pulse for October suggest that sentiment among financial-market participants is more positive than that in the real economy. Confidence at smaller companies and manufacturing activity tracked by satellites both slipped from the level in previous month, and the mood among steel producers and traders slumped on production curbs. International financial market experts, meanwhile, are increasingly optimistic about the nation's outlook, and sales managers' expectations were little changed. (Source: Bloomberg)
Japan: Retail sales rise for 11th consecutive month in Sept. A recovery in Japanese retail sales stretched to an 11th consecutive month in September, as consumers again showed a growing willingness to open their pocketbooks. Retail sales rose 2.2% YoY in September from a year earlier and 0.8% MoM. Sales at department stores and supermarkets rose 1.9% YoY. (Source: Bloomberg)
Indonesia: Economy may beat expectations, Finance Minister says. Indonesia's finance minister said Southeast Asia's biggest economy could expand at a faster pace next year than initially forecast. Economic growth may potentially be boosted by a pickup in investment in 2018, Sri Mulyani Indrawati said in an interview. At the same time, she warned of significant headwinds from "domestic-orientated policies, especially in major countries", such as the flow-through effects of U.S. President Donald Trump's plans to slash corporate tax rates. Indonesia's economy is forecast to grow by 5.4% next year, the fastest pace of expansion in five years, with a budget passed by the parliament last week projecting a narrower deficit and higher tax revenue. (Source: Bloomberg)
Philippines: Boosts liquidity risk-management rules for banks. The Philippines central bank has ordered lenders to enhance management of their liquidity risks, giving them 10 months to develop procedures based on new guidelines. The Bangko Sentral ng Pilipinas said the new rules emphasize the responsibility of a bank's board of directors to define the tolerance for liquidity risk, which stems from the inability of a financial institution to meet its obligations when they come due. Meanwhile, senior management must develop funding strategies that are aligned with a set risk tolerance, it said. (Source: Bloomberg)
Crude Oil: Brent trades above USD60/bbl amid optimism on OPEC deal. Saudi Crown Prince Mohammed bin Salman said in an interview with Bloomberg that "of course" he wants to prolong the Organization of Petroleum Exporting Countries' output-reduction deal into 2018. This follows Russia's President Vladimir Putin saying an extension should run through at least the end of next year. U.S. oil rig count rose by 1 to 737, Baker Hughes reported. (Source: Bloomberg) | |
| | | | | Other News:
Mah Sing: Three new projects record average take-up rate of 95%. The three projects are M Centura, Sentul in KL, M Vista@Southbay in Penang and Fern in Meridin East, Johor. In a statement yesterday, Mah Sing said more than 3,000 people visited the three sales galleries to select their preferred unit, in order to enjoy special early bird privileges. "The response we received this weekend indicate a 'feel good budget effect' which has revived sentiments and confidence in the market," said Mah Sing group managing director Tan Sri Leong Hoy Kum. (Source: The Edge Financial Daily)
AirAsia: AirAsia Japan's first flight registers 92% load factor. AirAsia's new JV low-cost airline in Japan commenced operations yesterday, more than two years after the group announced plans to re-enter the Japanese market. The company said 166 guests, representing a 92% load factor, were on board the inaugural service of AirAsia Japan. Flight DJ 0001 took off from Nagoya's Chubu Centrair International Airport and arrived at the New Chitose International Airport in Sapporo. Tan Sri Tony Fernandes said that AirAsia extensive network across Asia-Pacific, the group will expand as fast as it can to connect Nagoya with the rest of Japan, North Asia and Asean and to make Nagoya a major inbound destination to rival Tokyo and Osaka. (Source: The Edge Financial Daily)
Econpile: Ready for big infra jobs. Econpile's executive director Raymond Pang said Econpile is prepared to reap the benefits of the booming infrastructure segment which, at one time, offered lower margins compared to property-related jobs. The company is slowly moving away from smaller-scale substructure contracts, having accumulated better capacity and experience to undertake larger-scale ones. The company allocates an average MYR20m per year for capital expenditure to size up its fleet of machinery – together with R&D efforts – to improve their processes and equipment and to provide training for employees. Meanwhile, the company is looking to form strategic partnerships with main contractors to improve margins. (Source: The Edge Financial Daily) | |
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