Consumer stocks are among the biggest beneficiaries of Malaysia’s spending plan for 2027, boosted by higher allocations to improve households’ purchasing power, according to analysts. Malaysian stocks rose as much as 0.4% on Monday, extending Friday’s gains.
The property and tourism sectors are also marginal winners after Prime Minister Anwar Ibrahim on Friday announced stamp-duty exemptions and housing guarantees, as well as fresh funds for the extended Visit Malaysia campaign. Meanwhile, the construction sector may be dampened by the lack of new large infrastructure projects, while a minimum wage hike poses headwinds for labor-intensive industries such as plantations and glove-makers.
The budget ahead of a national election due early 2028 comes as Anwar seeks to rebuild public support after recent state poll setbacks. The benchmark Kuala Lumpur Composite Index remains down more than 4% this year, lagging some Southeast Asian peers including Vietnam and Thailand, as fiscal and political risks weigh.
Read More:
Anwar Budget Offers Wage Hike, Tax Relief Before Election
Here’s what market participants are saying about the budget announcement:
Citigroup Inc. (Megat Fais)
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From an equity standpoint, the winners are consumer, property, tourism, Johor, Sabah/Sarawak
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Higher minimum wage is negative for labor-intensive sectors like planters, electronics manufacturing services, glove-makers and selected consumers
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“We view Budget 2027 as modestly positive for Malaysian equities” as it remains growth supportive through tax cuts, income support measures, infrastructure spending and investment incentives, while preserving credibility through continued fiscal consolidation
Kenanga Investment Bank Bhd. (Peter Kong)
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“Given the absence of new large infrastructure projects, the spotlight shines brightly on private consumption plays as the main beneficiary”
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Combined effects on spending power may offset the impact of a minimum wage hike slated for mid-2027 primarily for recently beaten-down segments of consumer
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Spending on catalytic sectors to drive Malaysia up the value chain also remains evident in the area of technology, artificial intelligence, energy transition and climate adaptation; consumer, property, banks, utilities, and tech sectors benefit
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Plantation sector will likely feel the wage cost pinch
CIMB Securities (Hoy Ken Mak and Wei Yi Tan)
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“We do not expect Budget 2027 to provide a significant boost to domestic construction news flow, given the limited number of new large-scale infrastructure projects”
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Nevertheless, favors Gamuda Bhd. for selective exposure to new infrastructure projects, particularly the 4 billion to 5 billion ringgit worth of potential contracts from the Northern Perak Water Supply Scheme and large scale renewable energy projects
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Likes IJM Corp. for its ongoing restructuring initiatives, Malaysian Resources Corp. for Package CMC2 of the Penang Light Rail Transit Mutiara Line to unlock “the deep embedded value of Penang Sentral,” and Malayan Cement Bhd. for building materials plays
MBSB Research
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“Consumer staples and value retail emerge as clear winners, led by 99 Speed Mart Retail Holdings Bhd., MR D.I.Y. Group M Bhd., Nestle Malaysia Bhd. and Leong Hup International Bhd.”
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Construction stays firmly in play, backed by transport, water and regional infrastructure spending
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Property receives a timely lift from stamp-duty exemptions and 20 billion ringgit in housing guarantees
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“Budget 2027 is pro-growth, rakyat-focused and equity-supportive, reinforcing MBSB Research’s end-2027 FBM KLCI target of 1,850 points”
RHB Research (Alexander Chia)
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Collectively, the budget proposals will offer net benefits to the property, consumer, construction, oil & gas, and non-bank financial institutions
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The plantations, technology, and rubber products sectors are net losers after factoring higher labor costs from the raised minimum wage
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An allocation of 2.5 billion ringgit for non-revenue water reduction should benefit piping contractors such as KKB Engineering Bhd.
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Expect markets to remain range-bound featuring prevailing rotational plays
CIMB Bank Bhd. (Michelle Chia)
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“Fiscal guardrails set a constructive backdrop” for Malaysia government bonds, as gross supply declines to 179 billion ringgit next year from 185 billion ringgit in 2026
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2027 fiscal deficit target “remains credible,” as higher spending has been underpinned by contributions from government-linked companies including higher expected dividends of 32 billion ringgit from Petroliam Nasional bhd.