KUALA LUMPUR, Sept 8 (Bernama) -- Bursa Malaysia closed almost flat on Tuesday as buying interest rotated away from index heavyweights towards smaller-cap construction stocks, with sentiment affected by geopolitical uncertainty, said an analyst. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) eased 0.39 of a point to 1,714.40 from Monday’s close of 1,714.79. The benchmark index opened 1.65 points lower at 1,713.14 and moved between 1,710.44 and 1,714.50 throughout the trading session. The broader market was almost evenly balanced, with decliners leading gainers 548 to 546, while 598 counters were unchanged, 1,107 were untraded and 25 were suspended. Turnover expanded to 4.13 billion units valued at RM3.14 billion from 3.60 billion units valued at RM2.45 billion on Monday.
Financial Secretary hints at upside surprise for FY25/26 operating balance despite ongoing land sale slump
Hong Kong’s fiscal outlook is improving faster than anticipated, with the city potentially turning an operating surplus for the fiscal year ending March 2026 — a significant turnaround from earlier deficit projections.
Stronger Q2 Buoys Confidence, But Sustainability in Question
Financial Secretary Paul Chan noted that economic momentum in the first half of 2025, especially strong export activity and local consumption, has outpaced expectations. The second quarter marked the fastest growth in over a year, aided by global firms accelerating shipments ahead of impending US tariffs.
Initial forecast: operating deficit of “a few billion” HKD
Updated outlook: possible surplus if momentum holds in H2
However, Chan cautioned that growth may moderate in Q3, given the frontloaded nature of trade volumes.
Land Sales Drag Consolidated Account, but Structural Recovery Expected
While the operating account may swing into surplus, the consolidated account — which includes capital revenue like land premiums — is expected to remain in deficit.
Hong Kong has recorded three consecutive years of consolidated deficits
Weakness in land sales, a key source of government revenue, continues to weigh
Still, Chan expressed confidence that annual operating surpluses would resume consistently from FY25/26 onwards, signaling a possible inflection point in the city’s fiscal trajectory.
Cost Control and Workforce Rationalization in Focus
To address revenue constraints, the Hong Kong government is:
Shrinking public sector headcount
Tightening expenditure controls
These fiscal measures aim to improve structural balance, especially as recurring income sources like salaries and profits tax remain relatively stable.
Investor Implications: Near-Term Tailwinds, Long-Term Vigilance
While Hong Kong's near-term economic rebound supports a stronger fiscal position, headwinds remain:
Export activity likely to normalize after frontloading fades
Land market recovery may take longer amid global tightening and local property sentiment
Equity and REIT investors should watch for:
Recovery in land premium receipts
Signs of domestic investment revival
Government's success in spending discipline
If the surplus materializes, rating agencies and bond investors may
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