Analyst: BN's 'comfortable' win in GE14 will be good for business

GE14 | Markets are predicting a “comfortable” win for BN in the upcoming 14th general election, a result that will augur well for business, according to CIMB Research.

The research firm was reported in The Edge Markets today as saying that BN was expected to win “a comfortable majority of Parliament seats.”

“BN currently has 133 out of 222 seats in the House of Parliament.

“We view BN’s widely expected win as neutral to positive for the market.

“The stock market’s performance post the election will depend on the degree of selling pressure during the campaigning period and the poll results,” it said. 

CIMB Research also predicted that based on BN's manifesto for GE14, the construction and consumer sectors would benefit the most. 

BN manifesto won’t help budget deficit

However, the research firm noted that the many handouts and goodies contained in the manifesto would see a rise in government expenditure, and thus add to the country’s fiscal deficit.

For example, it calculated that BN’s promise to double BR1M handouts alone would amount to RM3.71 billion, or 0.25 percent of the GDP for 2018.

“(This) comes on top of the prior week’s civil servant pay hikes of RM1.46 billion, effective July 1 this year.

“New spending commitments imply that the budget deficit is unlikely to improve significantly from the target 2.8 percent of GDP, despite windfalls from higher oil prices and GDP growth,” the research firm said.

The 2.8 percent target, 0.2 percent less than what it was in 2016, was mentioned by caretaker prime minister Najib Abdul Razak in his Budget 2018 speech.

Najib, who is also the BN chairperson, launched his party’s GE14 manifesto last Saturday to much fanfare.

Aside from topping up on BR1M, he promised incentives for Felda settlers, aid for armed forces veterans and the subsidisation of public transport, broadband and various consumer goods and services. - Mkini