FBMKLCI
1808.88 -20.85pts (-1.14%)
Volume 2.225b Value 2.345b
1) The KLCI closed sharply lower today ending at -20pts
below parity following the significantly weaker US market overnight after the
VIX index to jump to 24% indicating the worries amongst investors. In the
regional market, bourses sunk following the negative wave of sentiments from
the West that sent NIKKEI -1.15%, HSI -1.90%, SHCOMP -0.62%, ASX -2.00%, STI
-1.09% deep into the negative territory. In the local market, FINANCIAL related
stocks weighed the CI down as CIMB -4.58%, PBBANK -2.03%, MAYBANK -1.52%,
AMBANK -1.61% and HLBANK -1.11% all closed distinctively lower as the country
awaits for more clarity from the on-going Budget 2015. Market breadth was
negative today as losers towered over gainers by 748 : 152. Futures closed at
1808 (parity).
2) Heavyweights : CIMB -4.58% RM6.66, PBBANK -2.03%
RM18.28, MAYBANK -1.52% RM9.70, SKPETRO-3.94% RM3.65, IHH -2.4% RM4.76, KLK
-2.66% RM20.48, UMW -2.84% RM11.62, AMBANK -1.61% RM6.70.
3) DBT : SCIB 13.235mil @ RM1.23 (17.987% PUC @ 14.9%
premium), HALEX 12.843mil @ RM0.98 (12.11% PUC @ 13.9% premium), GLOTEC
9.954mil @ RM0.08.
4) Situational:-
RHBCAP +2.06% RM8.88/ CIMB -4.58% RM6.66/ MBSB -10.97%
RM2.63 - The trio of CIMB Group Holdings Bhd, RHB Capital Bhd (RHB Cap) and
Malaysia Building Society Bhd (MBSB) have unveiled a proposed merger structure
. The three-way merger will first see a share swap between CIMB Group and
RHBCap at an exchange ratio of 1.38, This was based on a benchmark price of
RM7.27 per CIMB Group share and RM10.03 per RHBCap share, translating into a
price-to-book (PB) ratio as at June 30 of 1.70 and 1.44 times for CIMB Group
and RHBCap, respectively. CIMB Islamic will buy all the assets and liabilities
of RHB Islamic for RM4.15 billion, or RM3.53 per share. This values RHB Islamic
at a price-to-book ratio of two times its unaudited consolidated net assets to
equity holders of RHB Islamic of RM2.07 billion as at March 31 this year. CIMB
Islamic will buy MBSB RM2.82 per MBSB share, and together with RHB Islamic,
will merge to form a mega Islamic bank.
5) Budget 2015 Summary
For 2015, economic growth is expected to remain strong
between 5% and 6% while the fiscal deficit is projected to further decline to
3% of GDP
In 2015, the Federal Government revenue collection is
estimated at RM235.2 billion, an increase of RM10.2 billion from 2014. The 2015
Budget allocates a total of RM273.9 billion, an increase of RM9.8 billion
compared with the 2014 initial allocation. Of the amount, RM223.4 billion is
for Operating Expenditure while RM50.5 billion for Development Expenditure.
Infrastructure projects will be implemented:
Construction of the 59-km SUKE at a total construction
cost of RM5.3 billion; Construction of the 276-km WCE at a total construction
cost of RM5 billion; Construction of the 47-km DASH at a total construction
cost of RM4.2 billion; Construction of the 36-km EKVE at a total construction
cost of RM1.6 billion; Upgrading the East Coast railway line with an allocation
of RM150 million; Construction of the 56-km Second MRT Line an estimated cost
of RM23 billion; LRT 3 Project, which will link Bandar Utama to Shah Alam and Klang,
at an estimated cost of RM9 billion, To start construction of the 1,663-km
Pan-Borneo Highway comprising 936 km in Sarawak and 727 km in Sabah at a total
construction cost of RM27 billion.
Positive for contruction players particularly in East
Malaysia such as NAIM, HSL, CMS
HSBB
A sum of RM2.7 billion will be spent over the next three
years to build 1,000 new telecommunication towers and laying of under sea
cables. – positive for OCK
GST Impact
the Government has also agreed electricity consumption that
is not subject to GST be increased from the first 200 units to 300 units. RON95
petrol, diesel and LPG be given relief from the payment of GST.
Income Taxes
Chargeable income subject to the maximum rate will be
increased from exceeding RM100,000 to exceeding
RM400,000. The current maximum tax rate at 26% will be reduced to 24%, 24.5%
and 25%. Government proposes the existing tax relief for treatment of serious
diseases be increased to RM6,000 per year.
assessment 2015, cooperative income tax rate will also be
reduced by 1 to 2 percentage points. For year of assessment 2016, will be
reduced to 24%; For year of assessment 2016, income tax rate for SMEs will also
be reduced by 1 percentage point from 20% to 19%
Fuel Subsidy
the Government will develop a new mechanism for providing
petroleum subsidy. I will announce the new mechanism soon. +ve Dsonic
Education
Education Blueprint 2013 – 2025, the Government will
allocate RM56 billion to the Ministry of Education for various teaching and
learning programmes.
the Government will increase the student intake in
vocational and community colleges through the Vocational and Technical
Transformation programme and upgrade colleges. For this purpose, the Government
allocates RM1.2 billion.
+ve educational players such as Presbhd
Finance
EKUINAS will be allocated RM600 million to increase
bumiputera ownership in private companies and GLCs. To date, EKUINAS has
cumulative investments of RM2.3 billion in various sectors.
Healthcare
Government will allocate RM23.3 billion to implement the
following initiatives:
Build two hospitals namely Hospital Dungun in Terengganu
and Hospital Seri Iskandar in Perak. Another 20 Health Clinics and 37 dental
clinics,
Additional 30 1Malaysia clinics, bringing the total to
290 clinics nationwide
+ve for Pharmaniaga
Replace 635 units of haemodialysis machines in Government
hospitals and clinics with an allocation of RM30 million. Provide medicines for
patients undergoing chronic and acute haemodialysis treatment with an
allocation of RM45.4 million.
PRIMA
Build 80,000 units under the 1Malaysia People’s Housing
Programme (PR1MA) with an allocation of RM1.3 billion. ceiling of household
income is raised from RM8,000 to RM10,000.
Government has agreed to extend the 50% stamp duty
exemption loan agreements to increase
the purchase limit from RM400,000 to RM500,000. The exemption will be given until
31 December 2016.
Rural Development
sum of RM4.5 billion will be allocated, particularly in
Sabah and Sarawak for the implementing of the following programmes:
Construction of 635 km of rural road with an allocation
of RM943 million; Implement electricity connection for 15,000 houses with an
allocation of RM1.1 billion; Implement rural clean water supply for 7,500
houses with an allocation of RM394 million;
Water Projects
To address water supply shortage in the Klang Valley, the
construction of Air Langat 2 Water Treatment Plant will be expedited. Costing
RM3 billion, the plant will increase the supply of treated water to 1,130
million litres daily. A sum of RM112 million is allocated for setting up
leakage control zones as well as detecting and repairing leaking pipes. – Jaks, Engtex, Salcon, Puncak
Security
RM9.1 billion allocated to the PDRM. A sum of RM804
million is also allocated to Maritime Enforcement Agency Malaysia to strengthen
maritime enforcement. +ve Digistar
To increase the readiness of ATM’s personnel and assets,
RM7 billion will be allocated to purchase and maintain the defence assets.
Allowances and Bonuses
we will increase BR1M from RM650 to RM950. The assistance
is for households with a monthly income of RM3,000 and below. It will be
disbursed in three instalments
For households with a monthly income between RM3,000 and
RM4,000, the Government will increase BR1M from RM450 to RM750.
For single individuals aged 21 and above and with a
monthly income not exceeding RM2,000, BR1M will be increased from RM300 to
RM350 a year.
For civil servants, I am pleased to announce a half-month
bonus with a minimum payment of RM500 to be paid in January 2015. Government
pensioners will also receive special financial assistance of RM250.
Starting January 2015, a RM100 each will be given to all
primary and secondary school students with an allocation of RM540 million which
will benefit 5.4 million students. Government will continue to implement the
1Malaysia Book Voucher Programme with the assistance of RM250 per student.
6) Market: the overall sentiment remains bearish and we
expect this to continue heading into 3Q reporting season. Next support 1800pts
