I think now market waiting for fresh leads. Many people wait and see. Including myself

Read somewhere budget 2016 going to increase tax ? (cannot find where I read already...)

i prepared to long usd on 3 days ago at 4.20 but did not in the end.

will watch very closely on fri-mon.

tax... it will surely be a combination of more tax and more borrowings; if no tax incr, budget deficit will swell.



external leads... crude seems to get strong support at 45; china appears stable; usd inching up as euro may get qe again... or will it?

Maybank suggested the increase in taxes.

GST collection highly may exceed expectation, so it is the one can fill up the gap.

Mind that when inflation hit, aka price of goods rise, GST collection may rise as well as GST is taxed based on the retail price.

So GST is the one can plug the deficit, as long as there is prudent move in term of operation expenses.

Crude should hit the bottom by seeing it stablise quite well in the region of USD 45, although upside is capped on supply glut.

Nevertheless, RM may still at the weak side for near term.

This is the aftermath of bitter pil of QE (after experience sweetness for many years).

Awaiting release of BNM Statement of Accounts as at 15 Oct 2015 today...

that will work very well if gdp grows fast, disposable income rising > inflation.

if consumers dun hv the rm, they will cut back spending.

higher gst per item but over lower volume - no use.

raise gst %, even less volume.

and i think it is becoming very evident:

Yes, the economy is slow, but still at 4.x%.
When GDP grows at 4.x%, means there will be at least 4.x% increase in disposal income.

There will be still pay increment here and there, although at slower rate.
Labour market out there actually still quite tight, although we keep on hearing VSS here and there.
Just goyang kaki high pay one not available.

and herein lies the problem:

4.x% incr in disposable income, urban-suburban inflation in reality 8-10%.

rural 2% inflation does not help as they are not the big spenders.

imo, this 4.x% gdp growth will decline further very soon - from what i see at the kopishops, property market, my own spending.

Yes, that's the problem faced by inflation, especially in term of individual front.

In term of macroeconomy, it is undeniable, GST collection may go up together with inflation and economy growth despite at a slower pace.

That's the "beauty of GST" as compared to income tax, whereby when company and individual make less profit/income time, tax collected may go down, whilst GST won't face this situation, as long as people need/want to consume goods.
The creator of GST system is indeed "genius".

Don't get me wrong, I don't try paint a "beauty" picture on GST collection or saying deficit is easily plugged by GST collection, just this is what I realised after study the GST system previously.

No doubt, it is difficulty time ahead, and economy growth will face strong headwind near term.

The truth is still in the fact that as more taxes are levied on the rakyat, the economic activity will slow down.

Yes budget surplus will show as positive news, just like in the US, their low interest rate help reduce interest expenditure hence budget surplus.

Bro any idea what time the budget will be announce by the PM?

he usually starts talking, live on tv at 4pm on a fri, goes on for an hr.

by time he finish, markets, bank already close.

then people digest over weekend, react on monday.

This post has been edited by AVFAN: Oct 22 2015, 03:50 PM

Bank Negara's international reserves at US$94.1b as at 15 October 2015.
The reserves position is sufficient to finance 8.8 months of retained imports and is 1.2 times the short-term external debt

This post has been edited by nexona88: Oct 22 2015, 06:11 PM

Looks like the current level 4.20-4.30 is stable, no more exodus of foreign funds and already factoring in the domestic political issues and economic fundamentals

Only oil price will have the short term effect on RM. And budget this Friday should be positive for the RM. Until the FED interest rate threat resurface

Could be back down to 4.00 or even 3.xx if political issues are resolved by year end and FED's direction is no more an uncertainty.

Unker's prediction 4.7-4.8 looks vulnerable now...

Time to short USD?

you are confident?

I no balls. I will stay away in the meantime first

Want to bet 3 x ?

sure!

but what is starting point? 4.25 or 4.28?

Rates at 4.00pm Friday vs rates at 10.00am Monday