More “goodies” for Malaysia’s consumers could be on the way after Malaysia’s new Pakatan Harapan government moved ahead with replacing the goods and services tax, DBS said in a note last week.
Among the potential policy changes in PH’s manifesto were gradually abolishing tolls, providing targeted petrol subsidies, extending the duration of some student-loan repayments and reducing the excise duty for smaller imported cars for first-car buyers, DBS noted.
“The objective of the PH government in unveiling these populist measures is to address the high cost of living, particularly for the Bottom 40
households,” it said. “With the upcoming economic stimulus to be implemented by the newly elected PH government, coupled with the feel good sentiments arising from the new administration, we believe that the consumer sentiments index will continue to strengthen going forward which is generally positive for the consumer sector.”
It upgraded British American Tobacco to Buy as its top pick for exposure to the consumer recovery theme. It upgraded apparel retailer Padini to Hold.
Stocks likely to benefit but not under DBS coverage include Nestle (M), Aeon (M), 7-Eleven Malaysia, Mynews Holdings and Power Root.