KUALA LUMPUR (May 15): PPB Group Bhd, controlled by tycoon Robert Kuok, expects the removal of the goods and services tax (GST) as pledged in the Pakatan Harapan's (PH) election manifesto to be positive for the retail sector.

"Theoretically, prices will fall and people will be left with more disposable income (to spend on trips to the) cinema or food. So, retail trade is likely to go up a bit," its non-executive chairman Tan Sri Oh Siew Nam told reporters after the group's annual general meeting (AGM) today.

However, Oh doesn't see the group benefiting significantly from the removal as most of its revenue are derived from flour, which falls under the list of GST zero-rated items. Sixty-eight percent of PPB's revenue is derived from its grains and agribusiness segment.

"Also, a 6% (rate) change is not a lot," he said.

He added that consumers may choose to spend on other items such as healthcare instead of leisure, limiting spillover benefits to PPB's film exhibition and distribution, as well as consumer segments.

Meanwhile, the group's environmental engineering and utilities segment will see sewage and water treatment services provider chemQuest Sdn Bhd focusing on expanding business in Malaysia before it ventures overseas, said chemQuest group managing director Leong Yew Weng.

"Our next stop will probably be Indonesia," Leong said, adding that he is hopeful that the change in Malaysia's government may present the group with new opportunities.

At 3.29pm, PPB shares were up 10 sen or 0.5% at RM20.08, with 573,200 shares traded, bringing a market capitalisation of RM23.81 billion.

http://www.theedgemarkets.com/article/possible-gst-removal-seen-improve-retail-sentiment