KUALA LUMPUR (Sept 11): Construction, utilities and consumer sectors are expected to be among the key beneficiaries of Budget 2027, said MBSB Investment Bank.
In a note on Friday, the research house said construction stands to benefit most directly from higher budget allocations, as increased development spending and faster project implementation under the 13th Malaysia Plan could boost contractors’ order books and earnings.
MBSB expects development expenditure to rise to between RM85 billion and RM90 billion as implementation of the 13th Malaysia Plan gathers pace. The budget is likely to focus on projects such as flood mitigation, water infrastructure, roads, public transport, hospitals, schools and facilities supporting industrial development.
“Sabah and Sarawak should continue to receive meaningful allocations, while infrastructure requirements associated with the Johor-Singapore Special Economic Zone could provide an additional source of project flows,” said the research house.
Potential beneficiaries include: Gamuda Bhd (KL:GAMUDA), IJM Corp Bhd (KL:IJM) and Sunway Construction Group Bhd (KL:SUNCON), which are positioned for larger and more complex infrastructure packages; Malaysian Resources Corp Bhd (KL:MRCB) for its exposure to transport and urban infrastructure; Malayan Cement Bhd (KL:MCEMENT) as a building-materials proxy; and Cahya Mata Sarawak Bhd (KL:CMSB) given its leverage to construction activity in Sarawak.
Meanwhile, MBSB expects utilities and electrification to benefit from the growing semiconductor, industrial and data-centre pipeline, which requires substantial investment in power generation, transmission, grid stability, water capacity and renewable energy.
The research house expects Budget 2027 to support grid upgrades, battery storage, large-scale solar, corporate renewable-energy procurement and energy-efficiency initiatives.
Tenaga Nasional Bhd (KL:TENAGA) should be the principal listed beneficiary of higher grid and transmission investment, while Pekat Group Bhd (KL:PEKAT) and Samaiden Group Bhd (KL:SAMAIDEN) could benefit from additional solar and energy-storage opportunities, it said.
On the consumer front, MBSB expects the government to continue targeted cash assistance, food credits and cost-of-living programmes, potentially with broader support for households facing higher essential expenses. This should favour companies exposed to groceries, affordable household products and basic food consumption, where demand tends to be more defensive and households are more likely to spend additional assistance, it said.
Companies to monitor include: 99 Speed Mart Retail Holdings Bhd (KL:99SMART) and MR DIY Group (M) Bhd (KL:MRDIY), given their extensive value-retail networks; QL Resources Bhd (KL:QL) through its integrated food and convenience-store exposure; and Leong Hup International Bhd (KL:LHI) through its exposure to affordable protein demand.
“Food-security initiatives that improve local production, supply reliability and rural incomes could provide an additional supportive channel for QL Resources and Leong Hup. Any upside, however, will depend on the scale and eligibility of household assistance, as well as the extent to which higher input and logistics costs offset stronger demand,” MBSB added.
The government is expected to table Budget 2027 on Oct 9.