KUALA LUMPUR: The 2017 Budget may spring some surprises that will drive Bursa Malaysia, although analysts do not expect much catalysts based on “uneventful” experiences in the past.
Late window-dressing activities may happen ahead of the annual budget presentation today, they said.
Bursa Malaysia yesterday closed marginally lower at 1,667.18 after two days of gains due to the fall in crude oil prices.
The FTSE Bursa Malaysia KLCI (FBM KLCI) was down 1.09 points from Wednesday’s close of 1,668.27. Trading volume had been thin over the last few days.
MIDF Research head Zulkifli Hamzah said there could be interesting market-friendly measures today, which could support the local stock market.
However, based on recent years, the annual budget had been rather uneventful, he added.
While expecting some rally, he said it could be offset by external economic factors on international macro concerns.
Zulkifli said certain stocks, which were beneficiaries of infrastructure development, especially in transportation sector, could rally.
“I would stay away from companies exposed to defence spending. Rumour is that curtailment of defence spending is rather significant,” he added.
Inter-Pacific Securities Sdn Bhd research head Pong Teng Siew expects some rally ahead of the bud-get over stockbrokers’ anticipation and hype.
Sectors expected to continue their good run include industrial and technology.
Construction shares rallied for two days but faltered yesterday, he said.
Pong expects the market-friendly measures to include those related to capital market and affordable housing.
On possible measures for affordable housing, MIDF Amanah Investment Bank Bhd chief economist Dr Kamaruddin Mohd Nor said the government could put more focus on building materials.
“Incentive-wise is the obvious mechanism for this industry. Other than that, certain exemption on imported raw materials would also help to manage the price may applicable to housing sector,” he said.