Parliament dissolution yet to impact the stock market, Rakuten says

There could be some possible stock market rally during the pre- and post-GE15 


THERE has yet to be any impact on the stock market after Prime Minister Datuk Seri Ismail Sabri Yaakob announced the dissolution of the parliament yesterday, a local research house said.

Rakuten Trade Sdn Bhd head of research Kenny Yee (picture) said the impact on the stock market is not visible at the moment, which is similar to the previous 14th General Election (GE14).

“If you ask me whether there will be any positive impact on the stock market — we did not see any, and this is even during the last GE14,” Yee told a media briefing in conjunction with the post Budget 2023 commentary today.

The analyst, however, expects to see some possible stock market rally during the pre- and post-GE15.

“In the previous elections, there is a before and after impact on the stock market. Certainly, there has always been a pre-election rally (during the GE),” he said.

Commenting on Budget 2023, he opined that the government need to find ways to foot the RM372.3 billion allocation for next year.

“I think there has been a lot of argument on whether or not we will be able to finance this huge budget. I feel that something needs to be done.

“It is difficult to comment whether the Goods and Services Tax (GST) will be re-implemented, but I find GST is one of the ways to finance the budget,” he said.

Nonetheless, he sees that the proposal for Budget 2023 will benefit the whole spectrum of the country’s population.

“Payouts for the underprivileged and more surprisingly, tax cuts for the middle 40% income earners should ease the burden of prevailing high prices.

“Though disposable income will improve from tax cuts, the intention is to alleviate the impact from prospective higher interest rates environment going forward,” he noted.

Moreover, he said that the biggest cheer for Budget 2023 will be from contractors as it saw a record high allocation for development amounting to RM95 billion, emphasising the dire need to revive the nation’s economy.

“As we are aware, the construction sector offers the highest multiplier effect, hence once this sector commences cranking up activities, the positive impact should spread across other sub-segments as its linkages are immense,” he added.