Kenanga keeps year-end target for FBM KLCI at 1,603 points
KUALA LUMPUR: The government’s RM322.5 billion allocation for the 2021 Budget is mildly “positive” for the stock market, said Kenanga Research, adding that the sector benefiting the most from the increased spending is construction.
“Most telling is the Finance Ministry’s estimate that the construction sector is expected to recover sharply by 13.9 per cent next year, from being the worst sector with a contraction of 18.7 per cent this year.
“Thanks to the 12th Malaysia Plan, which will see its first year starting off with a whopping RM19 billion increase in development spending to RM69 billion from RM50 billion, we should finally see the start of the Mass Rapid Transit Line 3,” it said in a note yesterday.
Kenanga said while the Kuala Lumpur-Singapore high-speed rail project remained a long shot, other projects covered under the allocation were the Pan-Borneo Highway and Gemas-Johor Baru electrified double-tracking project and the Johor Baru-Singapore Rapid Transit System.
Other sectors to benefit from the 2021 Budget are healthcare and consumer, while banks would gain to some extent from measures to preserve jobs and financial support given to borrowers. Besides that, rubber glove players would benefit from the absence of a windfall tax, it said.
Kenanga has maintained its year-end FTSE Bursa Malaysia KLCI target at 1,603 points.
Its top picks include Gamuda Bhd, Genting Malaysia Bhd, Hong Leong Bank Bhd, Inari Amertron Bhd, Hartalega Holdings Bhd, JHM Consolidation Bhd, KLCC Property Holdings Bhd, Malaysian Resources Corp Bhd, Tenaga Nasional Bhd and Telekom Malaysia Bhd.