Dear all, this
is my 3rd commentary in 1 week. The last time I wrote so many
commentaries in a span of a week was during the panic / massive selloff
of Glove stocks between end August - September. This time is because
this past week is probably the biggest week of the year packed with all
major events globally and domestically.
I
am not a Guru, not a Sifu, but I am an objective financial writer. I
believe readers who have read my writings would agree I share my
opinions on matters from a macro view down to the specific stocks with
integrity. The most important trait of being a writer is to be
responsible for what you write. What you write must be consistent and
can be validated. Also you must walk the talk. With that your reputation
will be one that is honest, accountable and transparent.
I
have written many times in the past year that I do not believe Glove
stocks should be subjected to windfall tax, as it is not a commodity
like Palm Oil and Oil & Gas. The mechanics will not work because
glove companies manufacture various kinds of products and gloves with
different classification across. In addition, Glove companies DO NOT
receive subsidies unlike commodities. Furthermore, the Government
through corporate income tax would benefit greatly from any supernormal
profits. That would make the most sense in terms of revenue collection.
Otherwise, being selectively arbitrary to target private sector
companies that are doing well is anti-capitalistic / interfering with
free market economics. This would attract negative repercussions as it does not instil confidence of investors in your financial markets. Ant Financial's IPO last minute suspension by Chinese regulators should serve as a stark reminder. Therefore,
I will reiterate here that Glove stocks should not and will not be
subjected to windfall tax in Budget 2021. Any irrational selloff should
be a window of collection. If
indeed it happens, it would be morally unconscionable as government
around the world are supporting and giving incentive to the healthcare
sector in the fight against Covid-19, not otherwise.
With
regards to the overall Budget 2021, it will be one of the most
expansionary budget (fiscally) as the government have been given the
mandate to resuscitate the economy at all cost due to Covid-19 pandemic.
Politics aside, all parliamentarians would want a budget that can help
the people and the economy.The Government also have the approval from
earlier August 24th Parliamentary session to raise debt ceiling to 60%
for this fiscal policies. If the Budget 2021 meets or exceeds
expectations, it will spur a broad based relief rally across all
sectors, not only glove stocks.
Lastly,
after 2 days since US Election day, the final results are still in
tabulation due to record voting and mail in ballots. As per my earlier
forecast, Biden will win and squeak past Trump. A Biden win is the
return to normalcy / normalisation of global politics, economics and
rebuilding of foreign diplomatic relationships between nations. If Trump
concedes and dont drag it out with court case, it will be best for
everyone. Otherwise, any irrational selloff is a buying opportunity. I
have said this as well through the week. My screen shot below shows my
recent buy call for my private subscribers during the irrational selloff
through the week.
I
am human and subjected to fallacy as well. Mistakes are common but I
believe what I have written so far is unlikely to be wrong. All the
best.
_______________________________________________________________
Telegram channel : https://telegram.me/tradeview101
Website / Blog : https://www.tradeview.my/
Facebook : https://www.facebook.com/tradeview101/or
Email me to sign up as private exclusive subscriber : tradeview101@gmail.com
Food for thought:
