Special Alert: Budget 2009 Wish List

After a spate of people and business "unfriendly" initiatives announced by the government in the first half of 2008, we think the Malaysian government is more likely to dish out some "goodies" in the up-coming Budget 2009 (next month - August08).

Let's do a count down on these less "unfriendly" news:

1. Petrol price hike from RM1.92 to RM2.70 (+41%) in June, led general consumers to dampen spending. General prices of goods and services (including food) rose significantly. Your nasi campur or mixed rice, is more expensive??? That's why.
   
2. June08 inflation touched 7.7%, meaning that everybody living in Malaysia are 7.7% poorer in real RM-value terms.
   
3. Plantations and electricity generators (Independent Power Producers) are slapped by wind-fall taxes. Hence, affecting profitability of investors, business owners and lenders of such industries.
   
4. As many as 200 Malaysian contractors have returned their letter of award to the Government due to escalating building material prices. Traditionally, such government tender jobs gives very, very lucrative margins. Well, this piece of information says a lot in our opinion. Think about it, if these contractors had already pulled away from these contract, what about the ordinary construction & development projects by the private sector?? To us, may even be loss-making. :(

Putting on our political analyst (not the most shout-about job in town) cap, we think the most appropriate thing for the government to do in order to:

1. Restore confidence in the rakyat.


2. Lessen rakyat's burden.


3. Feed the much deprived rakyat (who suffered 4.5 years of growth hunger) with some tangible goodies.


4. Position a "good" exit for the current prime minister who announced to hand over the helm in the middle of 2010 and pave a "good entrance" for his deputy.

is to (by the very least) announce some "people and business friendly" initiatives in the up-coming budget.

YouInvest Budget 2009 Wish-List.

1. Reduction in personal income taxes in the form of more relief and/or tax rate.
   
2. Reduction in EPF contribution by employees but maintain the rate of employers contribution.
   
3. EPF to allow contributors more allocation for repayment of home loans and unit trust investment.
   
4. No interest rate hike, until end of year. (We think that interest rate hike is unavoidable to control high inflation.)
   
5. Some tax relief to professionals across the board to plug the current brain-drain in the country.
   
6. Extra prudent government spending, especially on big value projects like the undersea electricity cable project (linking Bakun Dam to Peninsular Malaysia), and the 5 economic corridors. If the rakyat is going to tighten their belt and reduce unnecessary spending so should the government. We should do it all together since we are living under one roof and the government's money is the people's money. What more, the essence of a democratic government is only a mere representation of its people voices and opinions. So, in the case of misrepresentation, then the rulers are no longer relevant. In a democratic country, we do not need elite domination over the silence and the weak. Rent seeking and cronyism are definitely not welcome in any country let alone a beautiful democratic country like Malaysia.

Conclusion. Again, to sum it all up, we are turning bullish on the Malaysian stock market as we see some signs of improvement. Comparatively, the Malaysian market was extremely weak from March to July, and in our opinion, the turnaround could come in August and should be able to carry through to December 2009 when the UMNO election kicks in. So we are building our position now to take advantage for this relief rally.

YouInvest - Malaysian Investing Made Easy

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