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Budget to emphasise on automation, technology and sustainability, says RHB – The Edge Markets MY

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Sep 19, 2022

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KUALA LUMPUR (Sept 19): RHB Investment Bank expect the upcoming budget to emphasise on automation, technology and sustainability.
In a Market Strategy note on Monday (Sept 19), RHB’s Alexander Chia said the digitalisation drive could be positive for names like CTOS Digital Bhd, GHL Systems Bhd and Revenue Group Bhd.
He said social assistance initiatives may benefit the broader consumer sector.
“More punitive taxes on the brewery and tobacco sectors are improbable, as it will likely prove to be counter-productive.
“We have low expectations on any significant incentives for the property sector,” he said.
Chia said construction may see headlines from some pre-polls pump-priming but this is likely to be skewed towards smaller contractors.
He said larger projects could still be announced, but these would require private funding requirements.
“Also, the Government is unlikely to increase gaming taxes as the industry was badly affected by the pandemic.
“We also believe the NFOs will get to maintain 22 special draws in 2023 to maximise tax revenues,” he said.
Chia said the automotive sector may receive a fillip from incentives to expedite EV production and adoption, with an outside chance of greater clarity on the forthcoming excise duty reform.
Chia said macroeconomic risks remain centred on the monetary policy trajectory, coupled with an evolving geopolitical environment that continues to give investors pause for thought on the prospects for risk assets.
He said the market’s attempt to price in the outlook for 2023 continues to be stymied by limited visibility, leaving investors on the fence.
“We advocate a core defensive stance, coupled with a trading mentality.
“Investors should also seek attractive entry points to nibble on weakness.
“We remain ‘overweight’ on banks, non-bank financial institutions (NBFIs), oil and gas, healthcare, basic materials, gaming and technology,” he said.
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