By Ying Xian Wong
Malaysia's latest budget could be mildly positive for the local market, analysts say, continuing fiscal consolidation while advancing economic reforms.
There were no major surprises on the tax front, nor on the further winding back of subsidies, with the rollout of a carbon tax and higher excise duties on alcoholic beverages and tobacco broadly in line with expectations.
Measures to promote tourism--especially in the medical space--bolster infrastructure and help ease living-cost pressure bode well for various key sectors of the economy.
Here's what to watch:
Consumer: Cash aid for living costs is expected to support the consumer sector. Participating outlets such as 99 Speed Mart Retail and Mr. D.I.Y. Group stand to benefit, CGS International analyst Jeremy Goh said in a note.
Tourism: The government has allocated MYR700 million to boost tourism as part of a program to bring in 47 million visitors and 329 billion ringgit in revenue in 2026. This is positive for airlines, resorts operator Genting Malaysia and hospitality-related stocks, Citi analysts said in a note. REITs owning prime malls and hotels are also expected to benefit, CGS added.
Healthcare: A slew of measures tied to the medical field bode well for private healthcare providers such as IHH Healthcare and KPJ Healthcare, Maybank analysts said in a note. The budget included support for private hospitals in medical tourism, tax relief for medical expenses and insurance, public-private partnership allocations to reduce public healthcare congestion and tax incentives for private hospital healthcare funds.
Alcohol & Tobacco: To promote a healthier society, higher taxes on cigarettes and alcoholic beverages will kick in Nov 1. However, AmInvestment Bank notes these changes have been largely priced in. CGS International thinks the impact on brewers like Heineken Malaysia and Carlsberg Brewery Malaysia will be minimal as demand for beer is inelastic.
Renewables: New programs to boost solar-energy production and guarantee fixed payments for renewable producers are expected to boost Malaysia's clean-energy capacity, benefiting companies in the sector. While details on the coming carbon tax remain limited, it should encourage investments in renewables, Maybank said. Companies in focus: Solarvest, Samaiden, Pekat, BM GreenTech and Kawan Renergy.
Construction: Budget measures focused on upgrading airports, renewable energy, flood mitigation, water, hospitals, and rural infrastructure. Malaysian officials also plan to build a sovereign AI Cloud with an investment of MYR2 billion. This could benefit Gamuda, given its joint venture business to provide Google could services, Maybank said.
Write to Ying Xian Wong at yingxian.wong@wsj.com
(END) Dow Jones Newswires
10-13-25 0536ET
