'There should be a lot of investors running away from risky assets these few weeks.'
Approaching the 2023 Budget, some analysts predict the government will focus more on consumer spending than investment.
This is because the general election factor is expected to push the government to increase funds to companies of basic consumer goods.
According to the head of equity markets at BNP Paribas Asset Management, Zhikai Chen, the budget is likely to outline targeted subsidy issues including the B40 tax cut and the implementation of the goods and services tax.
Also supporting is the Chief Executive Officer (CEO) of Areca Capital, Danny Wong, who expects the budget to be designed for the recovery of Covid-19 and increase household income.
He commented that investors are expected to see more government measures and assistance to low-income groups affected by inflationary pressure.
The string also Chen commented that the presentation of the 2023 Budget will be a measuring stick of how the existing government reads the broad sentiment of the market.
Meanwhile, the government's focus on spending has had an impact on foreign investment in the country.
It is understood that foreign investors reduced holdings in the Bursa market by RM1.5 trillion for 14 consecutive days, which is the longest sale since December 2021.
These things indirectly bring the range of the KLCI index closer to the bearish market level.
Also, based on the budget history over the last 13 years suggests that the profit percentage as a presentation is low.
Even so, the construction sector is expected to continue to benefit from development spending in addition to the consumer sector due to cash assistance to households.
