Good budget for Corporate Malaysia: Kenanga IB | New Straits Times


KUALA LUMPUR: The 2020 Budget 2020 has turned out to be mostly positive for corporate Malaysia, according to Kenanga Investment Bank Bhd (Kenanga IB).

The firm said most measures announced were business and people-friendly, with the clear sector winners being technology, consumer and property.

“Technology gains because of generous grant incentives for digitalisation of SMEs operations coupled with 10-year tax exemptions for selected electrical and electronics companies, incentive for adoption of e-Wallet and extended period of capital allowances for automation initiatives,” Kenanga IB said in a report on Monday.

“Consumer gains from measures to boost employment, Visit Malaysia Year 2020 and goodies in the form of Bantuan Sara Hidup to lower income groups and special payments to those in the civil service by year-end. Property, because of the introduction of Rent-to-Own financing scheme and lowering of the threshold on unsold stocks of high-rise property for foreign ownership from RM1 million to RM600,000.”

Kenanga IB said banks were also benefitting, from measures to support SMEs and the property sector.

The firm made no changes to earnings forecasts but raised its sector call on property from “neutral” to “overweight” as prices of many stocks in the sector had fallen well below their respective target prices.

“Based on our analysts’ latest inputs of earnings estimates and target prices, we maintain our financial years 2019 and 2020 earnings growth rates of -3.1 per cent and 6.5 per cent with a year-end target for FBMKLCI at 1,642 points,” Kenanga IB said.


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