(Bloomberg) -- Malaysia’s retailers and tourism-related firms are poised to benefit from the national spending plan for next year as the government increases cash handouts and incentives to mitigate the impact of some subsidy removals.
The country will raise the minimum wage level to 1,700 ringgit ($395) from 1,500 ringgit in February and set aside 13 billion ringgit for poorer Malaysians, Prime Minister Anwar Ibrahim said in his budget speech on Friday. The government plans to trim petrol subsidies from mid-2025 to dial back its subsidies and social assistance bill by 14.4% next year.
Other measures announced include allocations to boost the tourism sector and facilitate energy transition.
READ: Malaysia to Cut Petrol Subsidy From 2025 to Slash Deficit
Here’s a look at some of the key winners and losers of the budget for 2025:
WINNERS
Consumption
A higher minimum wage and targeted aid, coupled with an earlier broad pay-hike for civil servants, would raise the disposable income for consumers. That should benefit retailers such as 99 Speed Mart Retail Holdings Bhd. and MR DIY Group M Bhd.
Energy Firms
The government announced a 300 million ringgit allocation as part of its energy transition plan to achieve net-zero goal by 2050. That’s triple the 100 million ringgit set aside for this year.
This is set to benefit companies involved in developing large-scale solar fields such as UEM Sunrise Bhd. and SD Guthrie Bhd. as well as grid operators such as Tenaga Nasional Bhd.
Tourism
Malaysia is setting aside 550 million ringgit to promote tourism ahead of its Visit Malaysia Year in 2026. Entertainment and gaming companies such as Genting Bhd. and airline operator AirAsia X Bhd. may benefit from a boost in tourism receipts.
Palm Oil Planters
The government’s plan to increase the threshold on profit that palm oil companies have to pay a windfall tax will positively impact earnings of major planters such as SD Guthrie, IOI Corp. and Kuala Lumpur Kepong Bhd.
LOSERS
Beverage Makers
Malaysia will increase its excise duty on sugary beverages by 40 cents per liter starting Jan. 1, adding on to the sugar tax that was increased under Budget 2024. That may raise the cost for companies such as Nestle Malaysia Bhd. and Fraser & Neave Holdings Bhd.
Steel Producers
Anwar announced that a carbon tax will be imposed on the steel-making industry in 2026, which may impact producers such as Southern Steel Bhd.
©2024 Bloomberg L.P.
