KUALA LUMPUR (Nov 9): There seems to be little reaction shown by the stocks of sectors purported to be the biggest winners from Budget 2021 despite numerous initiatives announced.

The FBM KLCI also closed in negative territory at noon market break, 5.80 points or 0.38% lower at 1,513.84 with more losers than gainers.

The government unveiled its largest-ever Budget on Friday, allocating RM322.5 billion in total expenditure which will help the virus-stricken country chart back economic recovery in 2021.

Various initiatives were announced which stood to benefit glove makers, construction companies, and property developers. However, the three sectors remained muted in this morning’s trading.

Meanwhile, British American Tobacco (M) Bhd rose as it is deemed to benefit from Budget 2021’s proposal to curb illicit cigarette trades.

When contacted, Inter-Pacific Securities Sdn Bhd head of research Victor Wan noted that there could be some pause after last week's strong gains.

“There may also be some wait-and-see as implementation [of initiatives] may still take time amid the pandemic conditions,” he told theedgemarkets.com.

Despite rumours in the markets, there was no windfall tax imposed on the supernormal profits of Malaysia’s big four rubber glove producers — Top Glove Corp Bhd, Hartalega Holdings Bhd, Supermax Corp Bhd and Kossan Rubber Industries Bhd.

Instead, the government said the glove makers will contribute a combined RM400 million to help bear some of the costs of a Covid-19 vaccine and health equipment. The four companies confirmed their donations, with Top Glove giving the biggest chunk of RM185 million. Hartalega has pledged RM90 million, while Supermax will give RM75 million and Kossan RM50 million.

“For [the gloves sector], it has traded higher in the first hour but it has fizzled off. It could be due to prices having traded higher prior to the Budget,” Malacca Securities Sdn Bhd head of research Loui Low told theedgemarkets.com.

Hartalega rose to an intraday high of RM18.80 this morning before settling unchanged at RM18.20 during noon market close.

The other three fell in this morning’s trade. Top Glove fell seven sen or 0.82% to RM8.43, Supermax lost four sen or 0.41% to RM9.74, while Kossan dropped seven sen or 0.93% to RM7.42.

Construction companies were also lacklustre, even though the government said it will go ahead with implementing transport infrastructure projects, boosting prospects for those in the sector.

The government has allocated RM15 billion to fund the Pan Borneo Highway, Gemas-Johor Bahru electrified double-tracking rail project and phase one of the Klang Valley double-tracking project.

The Rapid Transit System Link from Johor Bahru to Woodlands, Singapore, the MRT3 in Klang Valley and the High-Speed Rail project with Singapore will also continue.

According to Low, the earnings from projects awarded to companies may not be reflected so soon, noting that execution of the projects is more important for now.

Gamuda Bhd fell three sen or 0.81% to RM3.66, while IJM Corp Bhd remained unchanged at RM1.45.

As for property developers, they may continue to face a lack of catalyst for buyers to participate in buying properties, while the overhang in the higher range properties remains a concern, said Low.

On Friday, the government said it will extend full stamp duty exemption on transfer and loan agreements for first-time home buyers until the end of December 2025 to help boost home ownership. It will also set aside RM1.2 billion for public housing projects.

Sime Darby Property Bhd was unchanged at 58 sen, while Glomac Bhd fell 0.5 sen or 1.69% to 29 sen. SP Setia Bhd fell one sen or 0.7% to 71 sen, and UEM Sunrise Bhd dropped one sen or 2.47% to 40 sen. Mah Sing Group Bhd rose slightly by one sen or 1.02% to 99 sen.

Low noted that as earnings season is approaching, this is likely a more important factor traders will be paying attention to at the moment.

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