PETALING JAYA: Budget 2027 is expected to strengthen household purchasing power and support consumer spending, although rising labour costs could lead to uneven earnings growth across the consumer sector, according to BIMB Securities Research.
Budget 2027 is expected to provide a stronger boost to household consumption than anticipated. This is driven by higher cash aid allocations, enhanced personal tax relief and continued cost-of-living support measures.
Specifically, total Sumbangan Tunai Rahmah (STR) and Sumbangan Asas Rahmah (Sara) allocation has increased to RM16bil, while the monthly Sara assistance has been raised to RM150, providing eligible recipients with up to RM1,800 annually.
The introduction of Sara Madani, which provides twice-yearly payments to non-STR recipients, broadens support beyond existing beneficiary groups and increases the number of households receiving direct income assistance.
Consequently, BIMB Securities Research expects the immediate beneficiaries of Budget 2027 will remain consumer staples players because of the budget’s strong focus on food affordability, household assistance, Jualan Rahmah initiatives and expanded Sara coverage.
BIMB Securities Research identified QL Resources Bhd
and Farm Fresh Bhd as among the main beneficiaries of stronger food consumption, maintaining “buy” calls with target prices of RM4.80 and RM2.91, respectively.
It also named Nestle (Malaysia) Bhd and Dutch Lady Milk Industries Bhd as beneficiaries, with “hold” calls and target prices of RM92.20 and RM34, respectively.
Beyond essentials, BIMB Securities Research expects higher household incomes and tax savings to support spending on affordable discretionary goods. Value-oriented retailers are well placed to benefit, as their products are affordable even when consumers are cautious about spending.
