Excerpt from Maybank Investment Bank Berhad report.

Report Summary

• Budget 2026 continues Malaysia’s focus on fiscal consolidation and economic restructuring, targeting a lower budget deficit (3.5% of GDP) through increased tax revenues and reduced subsidies.
• Sectors positively impacted include consumer, construction, healthcare, and renewable energy, aligning with a domestic-centric investment thesis and supporting growth in these areas.
• Tourism is set to benefit from Visit Malaysia Year 2026, with various incentives to boost the sector and related REITs, while the New Investment Incentives Framework (NIIF) will encourage high-value manufacturing and services investments.
• New and higher taxes—such as a carbon tax, excise duties on alcohol and tobacco, and stamp duties on foreign property buyers—enhance revenue and support public health and housing affordability.
• The equity market outlook remains positive, with the KLCI projected to trend upwards, supported by ongoing reforms, strong domestic demand, moderate inflation, and a strengthening MYR.
• Key stock picks include Hong Leong Bank, Tenaga, Gamuda, IHH Healthcare, Westports, Pavilion REIT, Solarvest, and KPJ Healthcare, among others, reflecting the favored sectors.
• Risks include global geopolitical uncertainties, particularly potential US-China trade tensions, and challenges in sustaining government debt ratios despite deficit reduction efforts.
• Budget 2026 is seen as largely neutral for most other sectors, with notable negatives only for tobacco and alcohol companies due to tax hikes.
• Malaysia’s GDP growth for 2026 is projected at 4.0%-4.5%, with stable inflation (1.3%-2.0%) and unemployment (3.0%), underpinned by robust domestic demand and moderate export growth.
• Extensive support for MSMEs, digitalisation, green transition, infrastructure, and targeted social assistance programs are emphasized as part of the government’s long-term transformation agenda.

Above is an excerpt from a report by Maybank Investment Bank Berhad. Clients of Maybank Investment Bank Berhad can be the first to access the full report from the Maybank Investment Bank Berhad website : https://www.maybank-keresearch.com