Budget 2011 to have limited impact on the equity market


KUCHING: The 2011 budget that will be tabled by the Prime Minister, Datuk Seri Najib Tun Razak today will have limited impact on the equity market.

According to the director of OSK Research Sdn Bhd (OSK Research), Chris Eng, the announcement of Budget 2011 would have limited impact as most of the good news that would have major impact on the equity market had already been announced.

“Instead, the market is likely to move up in tandem with regional markets on hopes for further quantitative easing in the US and UK,” said Eng.

Overall, he said that he did not have many expectations from Budget 2011 but he expected some curtailment on the property sector likely in the form of a cap on loans to house value.

“Besides that, we also expect a hike in brewery tax and some confirmation that the LRT (Light Railway Transit), MRT (Mass Rapid Transit) and LCCT (Low-cost Carrier Terminal) projects will proceed,” he added.

When asked if he expected any corporate and individual tax cut to be announced during the tabling of Budget 2011, Eng pointed out that he did not expect the announcement during Budget 2011.

In addition, when commenting on whether OSK Research expected any further action taken by the government during the Budget 2011 to attract new investment under the 10th Malaysia Plan (10MP), Eng believed there would be a number of announcements

supporting the Entry Point Projects (EPP) as highlighted in the

Economic Transformation Programme (ETP) that was unveiled recently.

However, he had not expectations in particular on other relevant sectors such as the automotive, real estate investment trusts (REITs) and consumer retail segments.