MONEY MASTER

Simple Summary Chinese tech stocks have fallen 20% from their October high Hang Seng Tech Index dropped as much as 3.4%  in the latest session Tax hike fears and weak sentiment  are weighing on the sector Global AI valuation concerns  added to the selloff What’s Happening A key gauge of Chinese technology shares extended its decline on Tuesday, with the  Hang Seng Tech Index  slipping into  bear-market territory , down about  20% from its October peak . Losses were led by heavyweight names: Kuaishou Technology Tencent Holdings Alibaba Group Holding The index reversed earlier gains as selling accelerated through the session. Why Investors Are Selling Several factors are pressuring sentiment: Policy worries:  Investors fear Beijing may  raise value-added tax (VAT) on internet services firms , after recently targeting telecom companies. Global tech jitters:  Renewed doubts over whether  AI giants can justify heavy spending and high val...

Japan’s latest 40-year government bond sale delivered  stronger-than-average demand , offering temporary relief to markets after weeks of sharp volatility in long-term yields. Quick Summary 40-year bond auction beat demand expectations Yields eased after last week’s record spike Election-driven fiscal concerns remain unresolved More volatility likely in bonds and yen markets What Happened The  bid-to-cover ratio  came in at  2.76 , above the previous auction ( 2.585 ) and the  12-month average of 2.53 The  40-year yield fell 3.5 basis points to 3.9%  after the auction Demand eased  immediate fears over Japan’s long-term debt , though uncertainty remains elevated Why This Matters The auction followed a turbulent week in Japanese bond markets, triggered by fiscal and political shocks: Long-dated yields  spiked to record highs  after Prime Minister  Sanae Takaichi  proposed a  two-year removal of food sales tax Forty-year yie...

Malaysia is pressing ahead with  fiscal reforms to narrow its deficit and rein in government borrowing , as part of a broader effort to strengthen public finances and reduce rising debt-servicing costs, Deputy Finance Minister  Liew Chin Tong  said in Parliament on Thursday. The reforms are anchored under the  Public Finance and Fiscal Responsibility Act (Act 850) , which has already delivered tangible results. Annual new government borrowing has been  reduced from RM100 billion in 2021–2022 to around RM75 billion in 2025 , reflecting stronger fiscal discipline and consolidation. To sustain this trajectory, the government is  broadening its revenue base  and improving collection efficiency through measures such as expanding the  sales and services tax (SST) , rolling out  e-invoicing , and tightening expenditure via  targeted diesel and RON95 fuel subsidies . Authorities are also moving to  rationalise statutory bodies  to impr...

Malaysia’s real estate investment trust (REIT) sector may  avoid a tax shock , with  Kenanga Investment Bank  expecting the  10% withholding tax on REIT dividends to be fully renewed , despite the concession expiring at end-2025. Why Renewal Looks Likely Kenanga believes the government has  little incentive to change the current structure , given the limited fiscal benefit. Annual REIT net earnings:  ~ RM2.8bn Contribution to  2026 estimated tax revenue:   <0.2% Any policy shift would offer  immaterial fiscal upside , but  meaningful downside  to the sector Key point:   The cost to REIT valuations outweighs the tax gain to the government. What’s at Stake for Investors The concessionary  10% withholding tax , in place since 2016 and renewed annually, has been a key pillar supporting REIT yields. Investors already face an  additional 2% dividend tax  on income above  RM100,000 Effective dividend tax for lar...

 Malaysia’s real estate investment trust (M-REIT) sector may face a sharp drop in investor appeal if a long-standing  withholding tax relief on REIT distributions expires on Dec 31, 2025 , Maybank Investment Bank (Maybank IB) warned. The concession — in place since YA2016 — keeps tax on REIT income at  10% for most investors ,  0% for resident corporates , and  24% for non-resident corporates . Although repeatedly extended in the past, authorities have remained  silent  on whether it will continue into YA2026. What Happens If the Tax Relief Ends? Maybank IB said that without an extension, REIT distributions would revert to  marginal tax rates , potentially cutting  post-tax yields by 50–100 basis points . Such a reduction could: Lower net income for retail and institutional investors Make Malaysia’s REITs  less competitive  versus regional peers Deter foreign inflows Undermine sentiment despite the sector’s currently attractive...

Malaysia is expected to unveil an  expansionary yet fiscally disciplined Budget 2026  on Friday, aiming to  shrink the fiscal deficit  through improved tax collection and new levies, even as government spending rises to support growth. Economists project the  deficit to narrow to 3.4%-3.6% of GDP  next year from 3.8% in 2025, in line with Prime Minister and Finance Minister  Anwar Ibrahim’s medium-term fiscal consolidation target  of 3% by 2030. Total expenditure is forecast to climb to  RM435 billion , driven by record-high  operating expenditure of RM348 billion —reflecting  higher civil service wages ,  targeted cash aid , and  social spending .  Development expenditure  may rise modestly to  RM87 billion , with allocations for  infrastructure, green energy, and digital projects  under the  13th Malaysia Plan . Key projects include the  LRT Mutiara Penang ,  Johor–Singapore Specia...

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 lik...

US President Donald Trump vowed to impose new  tariffs and export restrictions on advanced technology and semiconductors  in retaliation against foreign digital services taxes that he says unfairly target American tech giants. In a social media post on Monday, Trump called the measures “discriminatory” and said they “outrageously give a complete pass to China’s largest tech companies.” He warned that unless such taxes are withdrawn, Washington would hit offending nations with  “substantial additional tariffs” on exports to the US , alongside curbs on  “highly protected technology and chips.” Rising Trade Frictions The move adds fresh uncertainty for global trade partners, coming just weeks after Trump rolled out country-based levies on imports and vowed further duties, including on furniture. The president has long argued that digital taxes penalize US firms such as  Amazon, Alphabet, and Meta Platforms , while sparing Chinese rivals. The US has already deployed...

T ax on sovereign and bank bond interest returns Aug 8, lifting yields and shifting investor behavior China has announced a  surprise reversal in its longstanding tax exemption  on interest income from sovereign and financial institution bonds — a policy shift that could  reprice parts of the RMB18 trillion debt market  and raise funding costs just as the economy shows signs of strain. What’s Changing? Effective  Aug 8, 2025 , the  Ministry of Finance  will impose a  6% value-added tax (VAT)  on interest earned from: Central and local government bonds Financial institution bonds However,  existing bonds issued before this date (including reopenings)  will remain tax-exempt — leading to a surge in demand for older paper. Market Impacts: A New Yield Gap Emerges Analysts from Huatai Securities estimate: Yield spread  between new (taxed) and old (tax-exempt) bonds could  widen 5–10 bps Yields fell  on long-term government...

Disinflation surprise boosts confidence in monetary easing strategy Turkey delivered a pleasant surprise to markets on Monday as  headline inflation slowed to 33.5% in July , down from  35.1% in June , defying Bloomberg’s median forecast of 34.1%. The deceleration strengthens the Central Bank of Türkiye’s recent pivot toward monetary easing — a move that had raised eyebrows across emerging markets. Disinflation Beats Forecasts Despite Tax Hikes The drop in annual inflation came  despite upward pressures from tax increases  on tobacco, fuel, and other goods. Notably,  monthly inflation climbed to 2.1% , from 1.4% in June, suggesting that  cost-push pressures remain active , even as broader disinflation sets in. Still,  seasonally adjusted core data  appears to support the central bank’s case that demand-side pressures are easing. CBRT Back on Easing Track — But Cautiously The  Central Bank of the Republic of Turkey (CBRT)  cut rates from...

Malaysia has officially scrapped its plan for a high-value goods tax (HVGT), opting instead to tax luxury items at  5% or 10%  under the existing sales tax system. The decision is part of wider fiscal reforms aimed at boosting national revenue. Other tax measures, including a capital gains tax, an expanded sales and service tax, and a low-value goods tax, are expected to add  RM500 million to RM10 billion  annually to government coffers. As of June 2025, Malaysia’s federal debt reached  RM1.3 trillion , up from RM1.25 trillion at the end of 2024. However, the growth rate is slowing, with projections dropping to  6% in 2025  as the government focuses on revenue expansion, optimized spending, and targeted borrowing for high-impact projects. Market Overview: FBM KLCI : 1,523.82 (-0.36%) Top Gainer:  PCHEM RM3.79 (+4.99%) Top Loser:  IOICORP RM3.75 (-2.85%) USD/MYR:  4.2354 (+0.06%) Investor sentiment on Bursa Malaysia remained cautious amid...

In a surprise comment from the Oval Office, President Trump announced that his administration is  "thinking about no tax on capital gains on houses." This could be a game-changer — not just for homeowners, but also for real estate investors and financial planners watching for macro signals. What’s the Proposal? Currently, capital gains from selling your  primary residence  are already partially exempt ($250K for singles / $500K for married couples). Trump’s remark hints at eliminating  all  capital gains tax on home sales — potentially extending even beyond those exemptions.   Why Does This Matter? Unlocking Housing Liquidity Many long-time homeowners hold off selling to avoid taxes. A full tax exemption could flood the market with high-equity homes, increase turnover, and boost transaction volume. Potential Market Acceleration In a high-interest rate environment, this move may stimulate real estate activity from the supply side — a clever offset to slow Fe...

A  little-known but powerful tax trick  is quietly reshaping how wealthy investors manage capital gains—and it’s all happening through the structure of  ETFs . Enter the 351 Conversion By seeding new ETFs with appreciated assets (like high-flying stocks), investors can  defer capital gains taxes  and swap into new positions  tax-free . This is done via in-kind transfers and strategic “heartbeat” trades (quick inflows/outflows that rebalance the portfolio). Example: The Twin Oak Active Opportunities ETF ($TSPX) launched with a concentrated stake in Snowflake & Datadog—then quickly flipped those into an S&P 500 tracker. Why?  To cleanly wash out taxable gains. Why It Matters: 351 conversions are surging quietly across Wall Street. They’re legal, but controversial. Critics argue they create  "unjustifiable loopholes"  in tax policy. For investors, it’s a  strategic way to rebalance portfolios —especially for those holding concentrat...

President Trump’s newly signed  One Big Beautiful Bill Act  is sending shockwaves through America’s energy landscape—and  cheaper electricity could be a thing of the past . Instead of boosting renewables, the sweeping law  pulls back green-energy incentives , prioritizes fossil fuel production, and leaves clean tech in limbo—just as AI-driven data centers are gearing up to consume  massive amounts of power . 1. Energy Transition in Reverse? The law  rolls back tax credits  introduced by the Biden-era Inflation Reduction Act (IRA), stalling momentum in solar, wind, and other renewable sectors. According to experts,  this could slash new power-generation capacity by 340 gigawatts  over the next decade—nearly one-third of what was expected. That means  less new energy , more pressure on aging infrastructure, and eventually,  higher bills for you . 2. AI's Power Hunger = Higher Costs AI isn’t just consuming headlines—it’s  devourin...

Sector Outlook: OVERWEIGHT Hong Leong Investment Bank (HLIB) maintains an  OVERWEIGHT  rating on Malaysia’s consumer sector, citing supportive macroeconomic fundamentals and easing cost pressures that are expected to drive  earnings recovery in 2H25 , despite the expanded Sales and Service Tax (SST). Key Calls and Target Prices Stock Call Target Price (RM) 99SMART (5326) BUY 2.98 AEON (6599) BUY 1.82 FOCUSP (0157) BUY 1.10 NESTLE (4707) HOLD 78.00 ORIENT (4006) HOLD 0.76 BJFOOD (5196) SELL 0.21 PWROOT (7237) SELL 10.77 Why the Optimism? 1. Cost Relief on Commodities Prices for  sugar, wheat, coffee, and palm oil  have stabilized or declined. Companies like  Nestle  and  Mr DIY  have already recorded margin improvements from lower input and inventory costs. The strengthening  Ringgit (target RM4.10/USD by year-end)  enhances import efficiency, especially for retailers. 2. Labour Market & Fiscal Support Unemployment remains low ...

As investors await the release of June’s  Consumer Price Index (CPI)  this Tuesday, all eyes are on how  tariff pressures  may have trickled into last month’s inflation print — and whether the  Federal Reserve  will respond with  rate cuts . Expectations at a Glance: CPI (Headline):  +0.3% MoM →  2.7% YoY  (up from 2.4%) Core CPI (Ex. Food & Energy):  +0.3% MoM →  3.0% YoY  (up from 2.8%) Though not an inflation spike, the upward movement — especially in  core inflation  — is expected to highlight how recent  tariffs  are beginning to impact prices. What’s Driving the Data? Used car prices are expected to be a significant contributor. As new car costs climb — partially due to tariffs — demand has shifted toward the secondhand market. This creates knock-on effects for  headline CPI , even as broader inflation stays relatively contained. Fed Commentary Incoming: Two key Fed officials are set to s...

UK Chancellor of the Exchequer Rachel Reeves has reportedly cautioned her Cabinet colleagues that the upcoming Autumn Budget may require further tax increases—albeit smaller in scale than last year’s £40 billion package—due to fiscal pressures arising from policy reversals on welfare reform. According to  The Times , Reeves emphasized that while the scale of upcoming tax adjustments will be more modest, the decisions will be politically and economically challenging. The Labour government’s decision to reverse previously planned welfare changes has created a budgetary gap that must be addressed to maintain fiscal credibility. Market Jitters and Ministerial Confidence The Chancellor's comments come in the wake of a volatile week in UK financial markets. Investor confidence was shaken following a tearful parliamentary appearance by Reeves, which sparked unfounded speculation about her position. Concerns were quickly calmed after Prime Minister Keir Starmer publicly reaffirmed his conf...

The Singapore Exchange (SGX) is experiencing a surge of IPO activity not seen since the pre-pandemic era, with a fresh pipeline of listings across data infrastructure, software, healthcare, and regional consumer brands. More than just headlines, this influx is reshaping SGX's market narrative—from a slow-growth, dividend-heavy bourse to a destination for innovation-led growth stories. Key Listings: What Investors Should Watch NTT DC REIT: Anchoring the Data Infrastructure Trade Deal size : US$770–860 million Valuation : US$1.6 billion portfolio across US, Austria, and Singapore Yield focus : High occupancy, institutional-grade tenants Cornerstone investors : GIC, AM Squared, Viridian AM NTT DC REIT is more than another yield play—it's  a proxy for global digital infrastructure demand , with the added appeal of institutional anchor support. As AI workloads and cloud demand surge, data centers become the "new real estate gold." A successful listing could revive interest...