PETALING JAYA: A potential increase in targeted cash assistance is expected to provide a further boost to domestic consumption, particularly for spending on essential goods, if additional allocations are approved.
While the direct earnings impact on listed consumer companies may be limited, the broader retail ecosystem stands to benefit from stronger household purchasing power.
That is how CIMB Research sees it.
In its report, the brokerage said: “We view a potential enhancement to the Sumbangan Asas Rahmah (Sara) programme as incrementally positive for Malaysian consumer companies, especially value retailers, mini-markets, grocers and manufacturers of eligible essential products.”
“However, we expect the incremental spending uplift to be more broad-based than in previous phases, given the significantly larger merchant network and wider basket of eligible products,” it noted.
Consequently, CIMB Research said that while the programme should continue to support domestic consumption, the earnings benefit for any individual listed consumer company is likely to be more modest.
Overall, the brokerage maintained its “neutral” stance on the consumer sector, and continued to favour companies with resilient earnings and structural growth drivers.
Its preferred stocks remain QL Resources Bhd
, Empire Sushi Group Holdings Bhd and Life Water Bhd.
“We view any further enhancement to the Sara programme as supportive of domestic consumption and incrementally positive for the Malaysian consumer sector,” CIMB Research said.
“However, we do not expect it to materially alter sector earnings, given the programme’s significantly larger base, expanded merchant network, and broader basket of eligible products, which should result in spending being spread across a wider ecosystem of retailers,” it explained.
The brokerage’s latest assessment followed recent media reports that Prime Minister Datuk Seri Anwar Ibrahim said the government is exploring an increase to the Sara cash assistance programme, subject to Malaysia’s fiscal position.
Anwar reportedly said preliminary discussions have been held with the Treasury, although no timeline or quantum has been confirmed.
Any additional allocation is expected to be considered as part of the Budget 2027 deliberations.
For context, the government allocated a record RM15bil to the Sumbangan Tunai Rahmah (STR) and Sara programmes in 2026, up from RM10bil in 2024, benefiting about nine million recipients nationwide.
As of July 16, 2026, Sara has recorded a 99% utilisation rate among eligible STR recipients, with cumulative spending reaching RM3.5bil.
The programme’s acceptance network has also expanded to 13,700 participating outlets nationwide, more than tripling from 4,100 outlets in July 2025, including more than 6,500 sundry shops, with the government targeting 10,000 such outlets over time.
Meanwhile, one analyst said targeted cash assistance remains an important support for domestic consumption, as such programme would help sustain consumer spending.
“So, any enhancement to targeted cash assistance should help reinforce household spending on essential goods, providing continued support for domestic consumption despite a still-cautious consumer environment,” he said, in reference to a potential review of the Sara programme.
“But in the long run, only companies with strong fundamentals and sustainable earnings growth can win, rather than those that depend on short-term policy-driven demand,” he added.
