MIDF: Budget will reinvigorate local capital market

 

The proposed capital gains tax on the disposal of non-listed shares may attract more listings on the local bourse, at the granular level, said MIDF Research.

It said the Securities Commission (SC) would facilitate more secondary markets for private market instruments to improve liquidity and enable better price discovery.

"Additionally, the issuance of dual-class shares would be permitted in order to encourage the listings of local high-growth technology companies.

"In our view, these measures may act as catalysts that would help to reinvigorate the local capital market," MIDF Research said in a statement.

Earlier, when tabling Budget 2023 at the Dewan Rakyat today, Prime Minister and Finance Minister Anwar Ibrahim announced the government will study the introduction of a capital gains tax for unlisted share disposal by companies from 2024.

MIDF said Budget 2023 was tabled against a backdrop of expected slower global economic growth arising from stubborn inflationary pressures, continued tightening of monetary policies of central banks across the world, and ongoing geopolitical tensions.

Hence, the budget aims to tackle the issues of cost of living while reforming Malaysia’s economy for more inclusive growth including strengthening the country’s environmental, social and governance (ESG) agenda.

The research house opined that the economic growth of Malaysia can be seen as normalising in the absence of any base effect, and for 2023, it maintains the forecast of 4.2 percent growth.

Commenting further on the budget, MIDF group managing director Charon Wardini Mokhzani said larger corporate initiatives such as improving the ease of doing business, reducing bureaucracy, as well as the extension of the Green Investment Tax Allowance and Green Income Tax Exemption programmes up to 2025 will make Malaysia more competitive as a business and investment destination, with the added attraction of it being at the forefront of regional sustainability development.

"In line with the Malaysia Madani concept, MIDF is thrilled to be playing our part in maximising the outcomes as well as economic and social returns the initiatives in Budget 2023 envision and generating lasting value for our stakeholders," he added.

- Bernama