KUALA LUMPUR, Nov 2 — The government’s effort to improve public finance as envisaged in the 2014 Budget will further strengthen the stock market and the foreign exchange market, an analyst said.
Affin Investment Bank Vice-President Dr Nazri Khan Adam Khan said the budget provisions, reinforcing the government’s commitment to improve public finance, will eventually lend support to Bursa Malaysia equities and ringgit trading.
In the medium term, the budget’s resolve to push ahead fiscal reforms, notably goods and services tax (GST) and subsidies reduction was a commitment to rein-in government wastage and corruption while giving fiscal incentives to spur private investment, will be taken positively by investors, he said.
“We reiterate our bullish local market view on three counts. First, the US and Europe’s improved macro condition should take centrestage and translate into stronger Malaysia economic growth as early as in the first quarter of next year.
“Secondly, government shifting its focus on fiscal discipline and balancing growth should lead to higher investor confidence, increase funds inflow and spur FTSE Bursa Malaysia KLCI up to 1,900 level by end-2014.
“Finally, the gradual recovery seen in global commodities after hitting multi-month-low imply bottom base and positive 2014 prospects, which may spill over to Bursa Malaysia equities,” Nazri Khan, who is also the investment bank’s Retail Research Head, told Bernama.
The resilient commodities recovery from multi-month-low should favour resource stocks such as oil and gas and plantation, he added. — Bernama
