PETALING JAYA: Rakuten Trade Sdn Bhd sees the consumer sector as the main beneficiary of Budget 2027, attributed to the individual income tax relief since 2010 that could strengthen spending power among middle-income Malaysians.
It noted that the government estimates that the combined tax measures could provide approximately five million taxpayers with up to RM1,600 in additional disposable income.
“The budget increases the individual income tax relief limit from RM9,000 to RM12,000, alongside a one percentage-point reduction in resident individual income tax rates for chargeable income bands of RM70,001 to RM100,000 and RM100,001 to RM150,000.
“The minimum wage will also rise from RM1,700 to RM2,000 from June 2027, with micro, small and medium enterprises with annual sales below RM50mil exempted,” Rakuten Trade said in a statement.
Rakuten Trade research head Kenny Yee said the consumer segment is the ultimate winner from Budget 2027’s sweetener overload.
“Beyond the extended cash handouts and wider tax reliefs, the recalibration of personal income tax could unleash potent spending power among middle-income households.
“Having waited more than 10 years for these adjustments, we believe they also provide an overdue ‘feel-good’ factor for the market,” he said in the same statement.
Beyond consumer spending, Rakuten Trade said it regards 2027 as a “year of delivery” for the construction sector.
“While no new mega-infrastructure projects were announced, the RM83bil development expenditure allocation could support ongoing project activity. Sabah and Sarawak will receive a combined RM34.9bil.
“In property, eligible first-time homebuyers purchasing homes priced up to RM500,000 qualify for full stamp duty exemption. For homes priced above RM500,000 and up to RM750,000, the first RM500,000 is fully exempt, with a 50% exemption on the balance.”
Rakuten Trade said the measures applied to eligible agreements executed from Jan 1, 2027 to Dec 31, 2030.
It added that these incentives could support mass-market demand and may benefit developers with relevant exposure.
“Utilities and renewable energy also remain in focus, including Tenaga Nasional Bhd
’s RM15bil investment to strengthen the national grid.”
It however cautioned that a favourable sector outlook does not guarantee gains for individual stocks.
“Company exposure, valuations, cost pressures and the ability to convert opportunities into earnings remain important considerations,” it said.
Meanwhile, RHB Research in a recent report said collectively, the budget proposals will offer net benefits to the property, consumer, construction, oil and gas, and non-bank financial institutions.
“The plantations, technology and rubber products sectors are net losers after factoring higher labour costs from the raised minimum wage. The Education Ministry was allocated RM69bil and healthcare RM47.7bil in addition to investments in regional civil infrastructure, energy infrastructure, green transition, food security, disaster readiness, and digitalisation and artificial intelligence initiatives.”
On the construction sector, it said gross development expenditure is budgeted at RM83bil for 2027 (2026 revised estimate: RM81bil) with a higher transport subsector allocation of RM17.6bil (2026 revised estimate: RM17.2bil) that mainly comprises highways and railways.
“Major project mentions were related to Johor Baru Elevated Autonomous Rapid Transit (e-ART), East Coast Rail Link Phase 2, Light Rail Transit 3 Phase 2, Penang LRT and Trans Borneo Highway, among others.
“An allocation of RM2.5bil for non-revenue water reduction should benefit piping contractors such as KKB Engineering Bhd.”
Separately, RHB Research said domestic equity markets would continue to be influenced by the geopolitical and macroeconomic overhang, raising equity risk premiums.
“The rising possibility of the 16th general election being conducted in 2027 diminishes near-term political risks. We continue to advocate a defensive posture combined with a trading stance, focusing on opportunities to build positions on weakness and maintaining a propensity to take profit.
“Until the overriding macroeconomic environment changes, we expect markets to remain rangebound featuring prevailing rotational plays.”
