Local Market Strategy
Local
Budget 2024 - Balance between fiscal discipline, while addressing Rakyat wellbeing and sustaining the country’s growth
Mon, 16-Oct-2023 09:57 am
by Research Team • Apex Research

  • Carrying the theme “Economic Reforms, Empowering the People” is the second series of the Madani Budget that aims to restore and restructure the economy and improve the living standards for all Malaysians.

  • Budget 2024 aims to narrow the country’s fiscal deficit from estimated 5.0% in 2023 to 4.3% of gross domestic product (GDP) in 2024 in bid to achieve the government’s long term fiscal consolidation target.

  • Despite the lower development expenditure allocation, the construction sector will be kept busy by several key mega infrastructure projects that remain on the table, coupled with introduction of new big-ticket projects. The healthcare sector occupying lion share of 10.5% over the total budget allocation highlights the government commitment in delivery of greater healthcare services and the renewable energy sector will be boosted by various incentives that aligns with the National Energy Transition Roadmap (NETR).

  • Property sector is touted to be the biggest disappointment following the lack of fresh initiatives to reduce property prices and improve housing affordability for the M40 group, while the raise in service tax implies that the cost of construction will be pass down to purchasers. With no new measures in the revision of Windfall Profit Levy, the plantation sector will continue its uphill battle with the rising cost of production.

  • We maintain our 2023F and 2024F year-end target for FBM KLCI are 1,497 and 1,547 respectively, based on assigned 15x and 14x PERs.
Sentiment: Neutral
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