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JF Apex, HwangDBS: Budget has neutral impact on market

KUALA LUMPUR (Oct 1): Both JF Apex Research and HwangDBS Vickers Research believe that the Budget 2013 will not have strong impact the local stock market.

JF Apex Research said in an early note: "Last week, the index rebounded from a low of 1595 but we expect it to remain below the resistance of 1,655 points due to the Budget's small impact on the market." The index closed higher at 1,636.66 points last Friday.

HwangDBS Vickers Research said: "On the whole, we reckon there will likely be a neutral impact on the broad market."

"On the chart, the FBM KLCI is expected to range-bound for the time being given the absence of material market catalysts. The benchmark index will probably swing between its key support and resistance levels of 1,600 and 1,655 ahead," it said.

Last Friday, US stocks closed out the final trading session of the quarter with modest losses. Similarly, European shares ended the quarter with a whimper.

Hwang DBS said sectors that may see positive impact are (a) tourist operators like Reliance Pacific, which may benefit from income tax exemption incentive; (b) construction plays like IJM Corp and WCT due to focus on the Tun Razak Exchange (TRX) development; (c) telcos  such as Axiata, Maxis, DiGi, due to one-off rebate to purchase smartphones by lower-income youths.

On the negative side, the possible losers may include property developers due to the hike in Real Property Gain Tax (RPGT).

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