Budget 2011 appears to promote private consumption and investment given its notable PPP initiatives in infrastructure development. While fairly Neutral, there were slightly more positive than negative surprises, especially since the highly anticipated tightening measures on the property sector did not materialize. We see the Construction, Property and Consumer sectors as the biggest winners from this Budget although we do not see a major market reaction as most of the main budget items had been unveiled earlier.
We have Gamuda (BUY, TP: RM4.31) and Ahmad Zaki (BUY, TP: RM1.45) as the Top Beneficiaries in the Construction sector, with the former having exposure to the KL MRT and the latter, given its emphasis on Government related contracts. It is, however, more difficult to pin down the winners in the Property sector but the overall positive news flow should benefit the largest and more diversified property player under our coverage, namely SP Setia (BUY, TP: RM6.38). On the consumer side, both Aeon and Parkson will reap benefits from efforts to spur the retail industry but we are Neutral on Aeon, thus leaving Parkson (BUY, TP: RM6.64) as our choice of Budget Beneficiary. We round off our selection with Kencana Petroleum (BUY, TP: RM2.06), which may be able to secure some O&G jobs in relation to the construction of the LNG regasification terminal in Melaka and will also benefit from the listing of MMHE Holdings, which should boost its valuations as a close peer.
The table below are the summary of top 5 beneficiaries for 2011 budget.
Source : OSK Research