Var­i­ous stocks to gain from Bud­get 2018

An­a­lysts: Con­sumer, lo­gis­tics and man­u­fac­tur­ing among win­ners

The Star Malaysia - StarBiz - - Front Page - By GANESHWARAN KANA ganeshwaran@thes­tar.com.my

PETALING JAYA: While the con­struc­tion sec­tor is an ob­vi­ous ben­e­fi­ciary of Bud­get 2018, stocks re­lated to the con­sumer, lo­gis­tics and man­u­fac­tur­ing busi­nesses are also likely to ben­e­fit from the bud­get.

An­a­lysts have pointed out that the re­duc­tion in per­sonal in­come taxes and al­lo­ca­tions tar­geted to­wards the B40 and M40 would boost pri­vate con­sump­tion and pos­i­tively ben­e­fit con­sumer-driven coun­ters on Bursa Malaysia.

B40 and M40 refers to the bot­tom 40% and mid­dle 40% of house­holds re­spec­tively.

TA Se­cu­ri­ties Re­search said that apart from con­struc­tion play­ers, con­sumer sec­tor stocks un­der its cov­er­age are an­tic­i­pated to ben­e­fit from Bud­get 2018.

“All in, we are pos­i­tive as con­sumer com­pa­nies would ben­e­fit from the higher spend­ing power of con­sumers within the B40 and M40 groups and the ex­pected in­crease in tourist ar­rivals.

“Al­lo­ca­tion for var­i­ous rail projects, air­ports, ports, hos­pi­tals and roads in the five main eco­nomic cor­ri­dors are pos­i­tive for the con­struc­tion play­ers such as Ga­muda Bhd, Sun­way Con­struc­tion Group Bhd, WCT Hold­ings Bhd and Gadang Hold­ings Bhd.

“As for con­sumer stocks, we think the main ben­e­fi­cia­ries un­der cov­er­age are Aeon, Pa­dini, Jo­hore Tin, Hup Seng In­dus­tries, F&N, QL Re­sources, Nes­tle, BAT, Heineken and Carls­berg,” said the re­search unit in a note.

Mean­while, AmIn­vest­ment Bank Re­search in­di­cated that lo­gis­tics and man­u­fac­tur­ing play­ers could also ben­e­fit from mea­sures.

In sup­port of In­dus­try Rev­o­lu­tion 4.0 in­vest­ments and busi­ness ac­tiv­i­ties, the Gov­ern­ment will pro­vide a match­ing grant of RM245mil un­der the Do­mes­tic In­vest­ment Strate­gic Fund to up­grade smart man­u­fac­tur- ing fa­cil­i­ties.

“Inari Amertron has in­di­cated that the group in­tends to in­vest in au­to­mated in­spec­tion ma­chines, which would cost about US$1mil per unit while V.S. In­dus­try has bud­geted RM20mil for in­vest­ments in au­to­ma­tion in FY18.

“Top Glove, Har­talega and Kos­san, with ro­bust ca­pac­ity ex­pan­sion though au­to­ma­tion and the im­pend­ing em­brace of In­dus­try 4.0, are also ex­pected to ben­e­fit from the mea­sures,” said the re­search house.

AmIn­vest­ment Bank Re­search also added that pro­pos­als in Bud­get 2018 tar­geted to­wards re­fur­bish­ment and con­struc­tion of air­ports are pos­i­tive to the lo­cal trans­porta­tion and lo­gis­tics sec­tor.

Note that, Bud­get 2018 in­cludes al­lo­ca­tion for the re­fur­bish­ment of ex­ist­ing air­ports in Penang, Langkawi, Kota Bharu and San­dakan.

Apart from that, a new air­port will also be de­vel­oped in Mukah.

“We also be­lieve the com­mence­ment of in­fra­struc­ture con­struc­tion in Dig­i­tal Free Trade Zone (DFTZ) as a pos­i­tive sign that this project is well un­der­way, which should en­hance the long-term out­look on the lo­cal lo­gis­tics sec­tor,” it said, adding that the Gov­ern­ment has al­lo­cated RM83.5mil in Bud­get 2018 for the first phase of DFTZ.

We are pos­i­tive as con­sumer com­pa­nies would ben­e­fit from the higher spend­ing power of con­sumers within the B40 and M40 groups. TA Se­cu­ri­ties Re­search

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