KUALA LUMPUR: Budget 2027, to be tabled on Oct 9, is expected to benefit the construction and building materials sectors, based on current market consensus of RM85 billion to RM90 billion in development expenditure, according to Moomoo.
The online trading and investment platform said the sectors could benefit particularly from contracts involving hospitals, schools and transport infrastructure.
It said beyond traditional construction materials, grid and water infrastructure, renewable energy and energy storage could also benefit from development spending.
"Semiconductors and artificial intelligence-linked names will continue to ride the data centre and National AI Action Plan wave.
"Lastly, targeted cash aids like BUDI95 would support value and affordable consumer stocks by protecting baseline household purchasing power,” it said in a statement.
But steel and high-carbon energy producers could face pressure from the proposed carbon tax, which would introduce additional compliance costs.
Moomoo said discretionary consumer stocks may face headwinds from the potential expansion or adjustment of the Sales and Service Tax (SST) framework, as middle-class spending power may come under pressure.
It added that tobacco and alcohol stocks could face pre-Budget uncertainty over potential excise duty increases.
For investors, Moomoo said diversification across sectors will be important, with opportunities spanning Bursa-listed companies and global companies linked to the AI and semiconductor cycle.
Moomoo noted that current market consensus estimates put Budget 2027’s total expenditure at around RM438.9 billion, comprising approximately RM353.1 billion in operating expenditure and RM85.8 billion in development expenditure.
This is broadly in line with the 13th Malaysia Plan (13MP) 2026-2030, which provides for average development expenditure of RM86 billion annually.
Beyond the headline spending figure, Moomoo said two key policy areas that could influence market sentiment and foreign capital flows are fuel subsidies and fiscal discipline, and taxation and government revenue.
On subsidies, the government’s ability to balance rising global energy costs with fiscal discipline will be closely watched, particularly after the BUDI95 basic subsidy quota was restored to 300 litres per month at RM1.99 per litre from Sept 1, benefiting more than 16 million people.
With the 2026 fuel subsidy bill potentially reaching RM40 billion, Moomoo said the government’s ability to maintain fiscal discipline while protecting households will remain under scrutiny.
On taxation, the market does not expect major new taxes; the focus is likely to remain on optimising the existing tax framework, including SST and the capital gains tax on unlisted shares.
The increase in the mandatory e-Invoicing threshold from RM1 million to RM3 million in annual revenue from Sept 1 also provides relief for small and medium enterprises (SMEs), while the proposed carbon tax targeting the steel and energy sectors remains an area to watch. - Bernama
