FBMKLCI
1750.11pts -3.20pts
(-0.18%) Volume 2.053b Value 2.022b
1) The KLCI saw
choppy trading as PM Najib announced a revised Budget for 2015 and cut GDP
growth forecast to 4.5%-5.5%. In the regional scene, bourses were mostly
stronger led by the NIKKEI which gained +2.07% amid yen weakness ahead of the
BOJ meeting today and tomorrow, SHCOMP +1.82% and HSI +0.90% also gained after
China's GDP data came in better than expected. In the local scene, penny stocks
were actively traded today as names like KNM +6.31%, SANICHI 0.00%, SUMATEC
0.00%, SYSTECH +8.62% topped the list of the most active volume today. Market
breadth was slightly positive as gainers edged losers by 418 :391. Futures
closed at 1746 (4points discount)
2) Heavyweights : CIMB-2.35% RM5.81, TENAGA -0.69%
RM14.40, GENTING -1.07%, PCHEM -1.20% RM4.94%, GENM -1.03% RM3.81, SKPETRO
-1.14% RM2.60, MAYBANK +1.47% RM8.92, PBBANK +0.68% RM17.76.
3) DBT: ASIABIO
8mil @ RM0.18, MAYBANK 7.857mil @ RM8.75, NATWIDE 3.157mil @ RM0.87.
4) Situational:-
TMAKMUR +0.69% RM1.44 - Tanah Makmur Bhd's wholly-owned
subsidiary Sri Jelutung Palm Oil Mill Sdn Bhd has entered into a memorandum of
understanding with Cenergi SEA Sdn Bhd's wholly-owned subsidiary Metro Havana
Sdn Bhd to build a biogas plant. The biogas plant will be adjacent to the
existing palm oil mill plant at Sri Jelutung in Pekan, Pahang, which is being
upgraded to 45.0 tonnes an hour from 30.0 tonnes an hour.
5) Budget Review 2015:
PM announced today that in light of falling oil prices,
volatile capital flows and a worsening global economic outlook:
*Malaysia's fiscal deficit target would be revised to
3.2% of GDP in 2015 - higher than the 3% set out in the Budget, but lower than
the 3.5% in 2014.
* Development Expenditure for 2015 would be fully
maintained, but Operating Expenditure is expected to be reduced by RM5.5
billion. (operating spending to include reconstruction of basic infrastructure
such as schools, hospitals, roads and bridges)
* The Government has provided an initial allocation of
RM500 million for rehabilitation works and welfare programmes for flood
victims, bringing the total to RM787 million. Will also provide an initial
allocation of RM800 million for repair and reconstruction of basic
infrastructure such as schools, hospitals, roads and bridges. Provide RM893
million under the 2015 Budget for flood mitigation projects.
* Malaysia to cut 2015 GDP growth forecast to 4.5%-5.5%
from 5%-6%
* Lowering oil price assumption to USD$55/barrel. It will
also delay gas price hike for industrial sector in 2015 & postpone
scheduled electricity tariff hike in 2015
* PM says will present 11th Malaysia Plan in May (to
outline the development expenditure until 2020.)
* The Prime Minister also set out a strategy to counter
external developments and strengthen Malaysia's economic resilience by continuing
fiscal reform and consolidation, assisting people and businesses affected by
recent floods, and ensuring sustainable economic growth, by: a) boosting
exports of goods and services b)enhancing private consumption & c)
accelerating private investment,
* In summary, the PM highlighted 6 key take-aways:
1) Malaysia is neither in a recession nor a crisis as
experienced in 1997/1998, and 2009 which warranted stimulus packages;
2) the strategies announced by the Government are
proactive initiatives to make the necessary adjustments following the
challenging external developments which are beyond it's control.
3) the current
account balance is expected to remain in surplus;
4) the financial
markets remain orderly and resilient. Although the ringgit has depreciated, it
is expected to stabilise over time to reflect the strong economic fundamentals;
5) Development Expenditure of RM48.5 billion for 2015
will be maintained and spent. This includes projects such as public housing,
flood mitigation, water supply, electricity and public transport infrastructure
such as Pan-Borneo Highway. Projects such as the MRT Line 2, LRT 3, High-Speed
Rail Kuala Lumpur-Singapore will be continued.
6) Operating Expenditure is expected to be reduced by
RM5.5 billion through re-prioritizing expenditure
6) Market : With no significant surprises from the budget
review, we expect the near term supports established from last week to
continue, despite concerns over the Ringgit and crude oil prices. Mid term
trading range seen between 1700-1760 points.
