Before any new policies or corporate result can fundamentally increase the profit of all companies. We feel at 1660 level is over bought and become a little expensive. So we will become rather cautious defensive from now.

Re-looking into our holding of Citi USD 34 and AIG 35. We continue to hold on to our position.

After the budget, today PM has mentioned that government will be soon reducing corporate tax to increase competitiveness. Market immediately view this as positive. I always favour a cut in both personal and corporate tax. On the other hand, introduce GST to tax by usage. Total tax collection may increase compare to the current model.

In long run, we always believe that AUF still has many potential especially resources plus it’s human capital policy. Current low interest may further pull the dollar down. We will continue to leverage down is necessary.

We have re-invested dividend into asset oriented stocks, linked to agriculture and a little on Bingo ahead of its new movie coming out.

We continue nibbling Sunway as we believed it is undervalued. The recent tax hike may slow down its potential. We bought CIMBC25 as hedging.

We have bought in Ascott REIT at SGD 1.250, Teledata SGD 0.011, Stemlfe at RM 0.360 and RHBCap at RM 7.150

After our own studies on the budget 2013, we think it is a pretty much election budget. We would say it is not a bad budget but neither it is a good one. Most measures for businesses are pro longed release pill except MRT project.

For Oil & Gas and Financial sectors incentives. We believe we can get a bit of return but the whole world not Malaysia alone is doing it. I do believe Oil & Gas we do have some strength.

Overall, i would suggest a KLCI range bound bias to lower to Friday close in the coming week. Again, we continue our defensive strategy in investing asset oriented businesses or agriculture or Oil & Gas as mentioned before.

We tip KLCI at 1625-1650 range bound but bias to lower challenging 1600.

In fact, after many years. We may not still have a lot of good technology companies both in IT and bio technology. But we should continue together with improving system to monitor the money spend. So it goes to the right target. How about environment? Again cleaning the river what about enforcement rules that punish those not responsible in our rivers? Otherwise you got to clean it again and again.

Helping the poors, doing more on education and most important healthcare is always i believe is the no 1 thing to be solved in Malaysia. But if i were to suggest. I believe most important is always to create a system that responsible before pouring money into it. So far, we have been always using money to hope for solving problem but always forgot that you need a good culture and system for a complete revamp.

Another example is like building mid cost house from RM 100,000 to RM 400,000. In fact, if we look at Singapore, Hong Kong and Shanghai. All these systems does not work and Hong Kong property prices are back to or above pre 1997 crisis level.

My example will be –

1st A cheaper interest rate for housing between RM 100,000 to RM 500,00. (1st home only at may be even 1%)
2nd Increase property gain tax for people who own more then 3 properties to 20% within 5 years.
3rd Increase stamp duty on property value above RM 1 Mil to subsidies to lower interest rate of point 1.
4th Financing for 4th property purchase only have max 50% margin financing.
5th Extra 1% stamp duty more for property value above RM 1 Mil if purchase with cash

Reasons are simple, may be i am wrong of above but main objective is how to assist in affordability at the same time do not hurt property developer that bring GDP contribution, government incomes and even a little from the rich that sure will profit due to their wealthy position.

Lets not worry about the bank as they will always trying every angle to achieve a min 10% loan grow. Dont believe me? Just ask yourself how many calls you got last 6 months that bank wants to offer you cash as personal loan? A situation long never seen since 1997 but back recent years.

Overall, i give it a pass but not outstanding.  Retail will gain some strength due to the government bonuses. Personal income tax of savings up to RM 400 plus is nothing for today increasing cost of living.