04 November 2018

[Budget 2019] You have to know these WINNERs and LOSERs !!!

It was suppose to be a national sacrifice” budget, but it turns out be a caring budget to take care the B40 targeted group while more prudent on the government expenditure. Prior to the tabling of Budget 2019 in Parliament last Friday, the markets reacted negatively in anticipation of a painful year ahead.

No more bad news = Good news ???

However, the reality, as it turned out, was not as taxing all because of the surprising RM 30billion special dividend to be given from Petronas. Effectively, this has lessen the need for deeper spending cuts and/or more punitive tax-raising initiatives. Thank you to Petronas, the national hero once again.

Let's have a summary of the potential winners and losers from this Budget 2019:

Carlsberg & Heineken (Positive)
Oversold position prior to Budget 2019 in anticipation of higher sin tax on alcoholic drinks, but it was a non-event last Friday. Potential relief rally for brewers.

BAT (Positive)
Absence of tax hike bodes well for the cigarette company. Potential relief rally.

Opcom (Positive)

Allocation of RM1bn from the government to develop broadband infrastructure in the next five years. Opcom is one of Malaysia's leading fiber optic manufacturer.

MyEG (Positive)
Targeted fuel subsidy to eligible vehicle owners need the help of technologically-ready provider like MyEG.

Mah Sing, LBS Bina, Huayang & Sentoria (Positive)

Lower interest rates, higher financing margin and 100% stamp duty waiver could help the first-time home buyers, and this is good news to affordable home developers.

KPJ Healthcare & IHH (Slight Positive)
Due to the new B40 National Health Protection plan for lower income group.

Genting & GENM (Negative)
Two of the biggest losers from Budget 2019 due to higher casino license fees and gaming duties.

Magnum & BJTOTO (Slight Negative)

Special draws will be reduced by half, but it's a relieve that sin tax was unchanged.

Nestle, F&N Malaysia, Power Root, BJ Food & MSM (Negative)
Due to the new excise duty on sugary drinks. MSM is local sugar refiner.

AirAsia & AAX (Negative)
Starting 1 June 2019, with the rate at RM20 for outbound travellers to ASEAN countries and RM40 to countries other than ASEAN. And, higher fuel price was projected for 2019 and 2020. The abolishment of the RM20,000 p.a. tax cap for Labuan-based companies and to be taxed at 3% flat. Companies like AirAsia and AAX register their aircraft in Labuan.

Sime Darby Prop, SP Setia, Sunway (Negative)
Increase in stamp duty, introduction of RPGT from year 6 onwards and REHDA promised 10% reduction in the prices of new houses.

Sime Darby Plant, Felda, IOI Corp (Negative)
Higher minimum wage will increase the labour cost for planters.

MAHB (Neutral)
Government proposed to set up the world's first Airport REIT. It doesn't affect the profits of MAHB because the only difference is that, once the airport REIT is established, MAHB will no longer pay the user fee to the government, but will instead pay to the new airport REIT.

Disclaimer: This article is not intended, and should not under any circumstances be construed as, an offer or a solicitation of an offer to buy or sell the securities referred to herein or any related financial instruments.

Have a good trade ahead !!!

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