Monday, August 26, 2019

Five sectors chief beneficiaries of new fiscal policies

Jul 24. 2019
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By The Nation

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Firms engaged in property development, retail, industrial estates, telecommunications and construction will benefit most from 12 “urgent” economic policies the new government will unveil in Parliament on Thursday (July 25), brokerage firms say.

 

Passkorn Linmaneechok, deputy managing director at Kasikorn Securities Co Ltd, said the policies will focus on improving lower-income people’s quality of life, especially in helping them secure a private residence. 

This will benefit listed property firms that build low-cost housing, such as LPN Development Plc and Pruksa Holding Plc, Passkorn said.

Also coming are pledges to reduce the cost of living, improve labour conditions, help farmers and promote innovation, all of which will boost purchasing power in the agricultural sector and in society in general, thus particular benefiting the retail sector, where CP All Plc, Siam Global Plc and Robinson Plc do most of their business.

Companies managing industrial estates, such as WHA Corp Plc and Amata Corp Plc, will reap the rewards of efforts to realise the grand ambitions of the Eastern Economic Corridor (EEC), Passkorn said.

True Corp Plc, Total Access Communication Plc (Dtac) and Advanced Info Service Plc are sure to benefit from investments in telecommunications infrastructure, especially 5G.

And construction firms including Italian-Thai Development Plc, Ch Karnchang Plc and Sino-Thai Engineering and Construction Plc will see earnings rise thanks to a policy to speed up development of infrastructure such as railways, roads and airports.

Terdsak Taweethiratham, vice-president at Asia Plus Securities, said a policy was coming aimed at boosting domestic purchasing power – by raising social welfare for the elderly, disabled and poor, the Mom Pracharat scheme, an increase in the number of state welfare cards issued, agricultural product-price insurance and farmers’ income insurance, among other means.

Medium-term tax reform that will reduce personal income tax by 10 per cent and trim taxes for online retailers is also in the pipeline, he said, as is a plan to increase the minimum daily wage to Bt400 from Bt325. 

Such reforms will take time because tax cuts invariably result in a bigger budget deficit, while the hike in the minimum wage will affect manufacturers and must first be endorsed by the Triple Committee representing the public and private sector and employees.

“Nevertheless, we believe these policies will benefit the retail sector, such as CP All Plc, Home Products Centre Plc, Robinson Plc, Siam Makro Plc and Berli Jucker Plc,” Terdsak said.

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