KUALA LUMPUR, Dec 5 (Bernama) -- Bursa Malaysia closed lower on Friday amid mixed regional market performance as investors turned cautious over a possible rate hike by the Bank of Japan (BOJ) and upcoming US economic data that may influence the Federal Reserve’s (Fed) interest rate decision next week. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) pared most earlier losses to settle 4.55 points easier, or 0.28 per cent, to 1,616.52 from Thursday’s close of 1,621.07. The benchmark index, which opened 0.37 of-a-point lower at 1,620.70, moved between 1,609.67 and 1,621.25 throughout the day. The broader market was negative, with decliners outpacing advancers 604 to 439. A total of 550 counters were unchanged, 1,151 untraded, and 18 suspended. Turnover declined to 3.17 billion units worth RM2.24 billion from 4.48 billion units worth RM2.75 billion yesterday. Rakuten Trade Sdn Bhd vice-presiden...
Balancing Fiscal Prudence and Rakyat-Centric Support
With Budget 2026 set for tabling on 10 October, economists at RHB Research expect the government to strike a careful balance between fiscal consolidation and growth-friendly reforms. The fiscal deficit is projected to narrow to 3.5% in 2026 and 3.2% in 2027, underpinned by an estimated RM89 billion in development spending — the first year of the 13th Malaysia Plan (13MP).
“Budget 2026 represents the last major opportunity for the unity government to implement meaningful reforms before political considerations ahead of GE16 dominate in 2027,” RHB noted.
Reform Momentum Building, But Challenges Remain
Key measures rolled out in 2025 — including the expanded Sales & Service Tax (SST) and the start of RON95 subsidy rationalisation — are expected to be refined further to exclude higher-income groups. Savings from subsidy rationalisation are likely to be redirected toward more targeted household assistance.
On the fiscal front, the lack of a Goods and Services Tax (GST) means the government will need to expand its revenue base without overburdening businesses. RHB highlighted that improved service delivery, digitalisation, and civil service reform could help enhance tax collection and reduce leakages.
Key Wishlist for Budget 2026
Analysts expect the budget to include measures aimed at:
Attracting FDI and cutting bureaucratic hurdles.
Incentivising automation, productivity gains, and TVET talent development.
Providing consumer support for lower-income households and possible civil servant bonuses, offset by potential excise hikes on sugar and sin products.
Offering regulatory clarity for the auto sector.
Boosting sectors tied to Visit Malaysia Year 2026, alongside support for construction and property.
Market and Investment Outlook
RHB noted that persistent de-dollarisation trends and long-term USD weakness could funnel more portfolio flows into high-growth emerging markets in 2026.
While Malaysia’s equity market has underperformed in 2025, much of the downside risk is seen as priced in. Still, further upside for the FBM KLCI will hinge on either a stronger earnings recovery or sustained foreign inflows. RHB maintained its end-2025 KLCI target at 1,620 points, pegged at 15x forward earnings.
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