Impact POSITIVE

Measures

• RM1b allocation under Tourism Infrastructure Financing Fund to strengthen the tourism sector including funding for hotel rehabilitation, urban renewal and heritage conservation.

• RM500m in tourism financing from BNM.

• RM200m to encourage, promote and market tourism.

• RM90m in grants to promote tourism activities.

• New chartered flights to and from East Asia and the Middle East.

• RM25m incentives in the form of discounts, vouchers and rebates for accommodation, tourism packages, handicrafts and works for domestic holidays up to RM100.

• RM10m to promote eco-tourism.

• RM10m for the ThinkCity initiative in Kuala Lumpur.

• 100% tax exemption granted on statutory income for tour operators who bring at least 200 foreign tourists a year or handle at least 400 local tourists

Comments

• The budget initiatives will boost tourism, benefitting the aviation sector and integrated resort operators.

Beneficiaries

• CAPITALA (MP: TP: RM0.60) and MAHB (MP; TP: RM6.05) will see higher passenger numbers. Specifically, in August, AirAsia operated 108 aircrafts and will operate 160 by end of the year which is timely to cater for international as well as local tourism arrivals moving into CY23. While we expect passenger throughput to continue to improve from 2HCY22, we only expect the number to match that of pre-pandemic by 2024.

• GENM (OP; TP: RM3.64) and GENTING (OP; TP: RM5.86) will see increased number of visitors to their integrated resorts.

Source: Kenanga Research - 8 Oct 2022