KUALA LUMPUR – The approval by Parliament of the Supply Bill 2021 (Budget 2021) worth RM322.5 billion at the policy stage on Thursday is seeing neutral reactions from markets, said an analyst.
Affin Hwang Asset Management Bhd managing director Teng Chee Wai said markets will continue monitoring revenue projection pending Parliament’s passing of the proposed Budget.
“The government probably will find other ways to collect enough revenue to sustain the Budget while companies are struggling to catch up amid economic slowdown.
“However, as we all know, what Budget 2021 is spending on goes towards the rakyat, which needs help,” he said in "The Trend | 2020 Market Review & Outlook" webinar today.
According to the Economic Outlook 2021 report, government revenue is expected to reach RM236.9 billion, or 15.1% of the country’s gross domestic product (GDP) next year.
The higher projection is based on the expected increase in tax revenue collection to RM174.4 billion and non-tax revenue of RM62.5 billion.
Teng said failure to pass the Budget may engulf markets in a cloud of risk aversion.
He said the Budget approval is vital for investors in ensuring the growth of the economy which is seen to be recovering.
“The approval of the Budget will provide more room for investors to invest more,” he said, hoping as a market player that the government will develop a more strategic agenda to help economic recovery from the Covid-19 pandemic and sustain Malaysia as a country of choice for investors.
On Thursday, markets reacted positively to the Budget 2021 approval, with the ringgit ending higher in almost 11 months against the US dollar, while Bursa Malaysia ended with a bang after the benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) closed 14.53 points higher at 1,612.11 compared with Wednesday's close of 1,597.58. – Bernama, November 28, 2020
