BMB INSIGHTS CENTRAL
Budget 2025: Key Opportunities for Traders in Tech, Green Energy, and Infrastructure
Date: 18/10/2024
Key Summary & Insights:
1. Economic Growth: Malaysia's GDP is expected to grow by 4.5% to 5.5% in 2025, supported by tech, energy, and infrastructure, creating a bullish outlook for corporate earnings and the market.
2. Stock Market Surge: FBM KLCI crossed 1,600 points, with a RM2 trillion market cap, signaling robust investor confidence and continued interest in large-cap stocks.
3. Ringgit Strength: The ringgit rose 14.4% against USD, benefiting import-heavy companies while challenging export-driven sectors like electronics and palm oil.
4. Semiconductor Growth: The National Semiconductor Strategy boosts high-value activities like IC design and AI, positioning local tech firms for gains as global demand increases.
5. Green Energy Focus: Investments in solar and hydrogen align with the Energy Transition Roadmap, positioning green tech companies to benefit from rising global ESG demand.
6. Infrastructure Boom: RM421 billion allocated for projects like RTS Johor-Singapore and Penang LRT will fuel growth in construction, materials, and transport.
7. Public-Private Expansion: Projects like Kulim Hi-Tech Park and Lumut Maritime City will boost industrial and logistics sectors, creating opportunities for real estate and supply chain companies.
8. Digital & AI Growth: AI, fintech, and robotics are incentivized, spurring innovation in tech startups and offering high-growth potential in digital transformation.
9. ESG Incentives: Strong ESG practices in sectors like Carbon Capture and Storage and renewables will attract investment, benefiting sustainable companies.
10. Dividend Tax Shift: A 2% tax on dividends over RM100,000 could drive investors toward growth stocks, favoring sectors like tech and healthcare over high-yield dividend stocks.
11. Subsidy Reductions: Fuel and electricity subsidies will be cut for top earners, likely increasing costs in transportation. Companies in logistics and retail may face margin pressure.
12. Water & Utility Projects: Investments in water and flood control projects open up opportunities for utility and environmental services firms with local operations.
13. Tourism & Aviation: Projects like RTS Johor-Singapore and Penang Airport expansion will boost tourism, benefiting airlines, hotels, and travel services.
14. Industrial Real Estate: Demand for industrial real estate will rise with developments like Kulim Hi-Tech Park, benefiting REITs and property developers.
15. Premium Services Demand: With reduced subsidies for high-income groups, premium healthcare and education services will gain, increasing pricing power for providers.
16. Logistics & Maritime Gains: Infrastructure projects like Lumut Maritime City and Pan Borneo Highway will enhance logistics, driving demand in maritime and transport.
17. Tech Innovation: Tax breaks for AI and fintech will fuel the growth of tech startups, with the potential for scale and venture capital investment.
18. Strategic Investments: GLICs’ RM25 billion injection into data centers, energy, and advanced manufacturing will benefit companies tied to these sectors.
19. Supply Chain Strengthening: Local suppliers in semiconductors and medical devices will benefit from government incentives, reinforcing Malaysia’s role in global supply chains.
20. Minimum Global Tax: The new Global Minimum Tax may prompt some multinationals to reconsider their presence, while domestic companies could gain a competitive advantage.
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