️Macro Alpha Analytics🫆

Amir Hamzah says ringgit on path to strengthen below 4 per US dollar https://theedgemalaysia.com/node/773760

99Smart : The only green in index 30

🌏 East Malaysia Big Winner – Sabah & Sarawak Stay in the Spotlight(MBSB) Both Sabah and Sarawak remain major beneficiaries under Budget 2026, with higher development allocations — an extra RM200m and RM100m respectively vs Budget 2025 — continuing their lead as the top recipients of Federal funds. 🔸 Special Grant rate for both states doubled to RM600m (from RM300m in CY23). 🔸 Total infrastructure development earmarked for East Malaysia hits a massive RM48b. 💪 Sarawak stands out with robust construction flows — a clear boost for Cahya Mata Sarawak (BUY, TP RM1.49), the sole cement producer in the state, well-positioned to ride upcoming infra demand. ➡️ Summary: East Malaysia continues to shine — fiscal firepower stays strong, infrastructure momentum intact, and local champions like CMSB poised to benefit.

🚧 Budget 2026 Construction Take – Smaller DE, Bigger Private Role(MBSB) Development Expenditure (DE) trimmed to RM81b (-5.8% YoY) vs RM86b in Budget 2024 — signalling no new mega projects for now, consistent with PM’s tone that it’s “not the time” for grand infrastructure builds. Instead, focus shifts to: ✅ People-centric & state-priority projects ✅ Industrial support facilities ✅ Public-Private Partnerships (PPP) – key driver ahead 💡 MRT3 Circle Line highlighted as a flagship PPP project, likely fully privately funded, setting the tone for future infra works. Despite smaller DE, sector outlook stays POSITIVE – sustained project flow, private participation & state-driven spending keep momentum intact. Top Picks: 🏗 Gamuda (TP RM6.35) 🏗 IJM Corp (TP RM3.60) 🏗 SunCon (TP RM6.53) 🧱 Malayan Cement (TP RM7.49) ➡️ Summary: Less fiscal firepower, more private muscle — construction story continues, just with a new funding playbook.

MBSB

Phillip Capital takeaways: Budget 2026 🙂 Positive: Consumer, Gaming, DC, Renewables, Technology, REIT 😐 Neutral: Auto, Construction, Healthcare, O&G, Plantation, Property, Telco 🙁 Negative: Tobacco, Brewers 🔹 Govt 2026E GDP forecast at 4.1% (at lower end of its projected 4.0–4.5%). Phillip Cap forecasts 4.5%/4.3% for 2025E/26E 🔹 Fiscal deficit narrow to 3.5% in 2026E (from 3.8% in 2025E) 🔹 Domestic demand, led by private consumption and investment to remain key growth driver 🔹 We continue to favour sectors backed by thematic tailwinds such as Construction, Industrial, Renewables, Technology, and EMS, which we expect to remain outperformers 🔹Maintain NEUTRAL on the market with end25 KLCI target of 1,610 🔹 Substitute SD Guthrie with KLK for large-cap top pick, and Pekat with Uzma for small-cap. (Feel free to reach out for the complete list of our large small-cap picks)

Budget 2026 – Mildly positive for equities 👍 (CIMB) We expect the market’s reaction to be mildly positive, with no major negative surprises or new taxes. * 💸 Positives: One-off RM100 cash aid (Feb 2026) for all Malaysians aged 18+, and foreign-sourced income tax exemption extended to 2030. * 🚭 Negatives: Higher excise duties on alcohol & tobacco, and higher stamp duty for property transfers involving non-citizens & foreign firms. * 🏗 Winners: Construction, tech & consumer sectors. * 🏠 Laggards: Property, brewers & tobacco. * 🎯 KLCI target maintained at 1,605 pts.

📢 Budget 2026 Quick Take – “The People’s Budget” Focus on Welfare, Not Windfall (UOBKH) Budget 2026 stays true to its “People’s Budget” theme — reinforcing welfare via cash aid, targeted subsidies, social protection, healthcare and education boosts, plus cost-of-living relief. While no clear sectoral star emerged, select beneficiaries stand out: 🔹 E&E Sector – Funding & soft loans to spur advanced packaging and IC design may benefit Inari, MPI, Unisem, Oppstar. 🔹 Consumer Plays – Cash handouts and Visit Malaysia Year 2026 (VMY26) should lift Oriental Kopi, F&N, MyNews. • Heineken & Carlsberg gain from tourism demand but face higher alcohol excise duties. 🔹 Tourism & Retail REITs – VMY26 momentum positive for Pavilion REITs, Genting Malaysia. 🔹 Infrastructure – Higher DE allocations, especially for Sabah & Sarawak projects: Sabah: Gamuda, IJM, MRCB, Suria Capital, GAQRS, WCT Sarawak: Hock Seng Lee, KKB Engineering, CMSB, SCIB, Azam Jaya 🔹 Utilities / Renewable Energy – Focus on regional grids, LSS6, Solar ATAP, off-grid electrification could support Tenaga, Pekat. ➡️ Overall tone: People-first budget with fiscal discipline; selective sectoral tailwinds but no broad-based rally trigger.

Genting & Genting Malaysia Suspended 市场传出私有化传闻，真假有待揭晓，拭目以待 ⭐️

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Petronas dividend makes up only 4.8% of Budget 2026, the lowest in 23 years Petronas Activity Outlook (PAO) 2026-2029 expected to be end of the year