Budget 2026 Bombastic Monitor list 💥💥💥
Budget 2026 Bombastic Monitor list💥💥💥
Budget 2026, scheduled to be tabled on 10 October 2025, expect a budget allocation of RM425.5bn (+3.3%) for 2026, consisting of RM341.5bn and RM84bn for operating and development expenditures.
Below are the sector and company that we can monitor:
1. INARI
- Budget 2026 is expected to deliver targeted support for Malaysia’s semiconductor ecosystem in line with the National Semiconductor Strategy (NSS) such as tax incentives, grants, special financing schemes, and additional funding for strategic investments.
- The government has also identified 13 potential national champions across the semiconductor value chain, including Inari Amertron to benefit from policy incentives, subsidies and capacity-building measures.
- Globally, semiconductor sales in July rose more than 20 per cent year-on-year, led by logic and memory segments supported by strong data centre spending and early adoption of AI-edge applications.
- Finance Minister II Datuk Seri Amir Hamzah Azizan stated that in this budget, gov will place greater emphasis on important industries like semiconductors, and there will be news of the government’s commitment to further boost this segment.
- Iphone 17 lead times expanded expects higher loading factors over the next two quarters compared to the historical 65%-70% range.
2. SLVEST
- Government has recently lowered the System Access Charge (SAC) by RM0.05/kWh, improving the economics for corporates sourcing green power. Meanwhile, the introduction of an ultra-high voltage tariff has lifted data centre electricity costs to RM0.59/kWh, making CRESS a cost-effective alternative.
- There is possibility of another round of large-scale solar program auction under LSS6 following conclusion of the LSS5+ award earlier this month, alongside potentially a second round of Battery Energy Storage System (BESS) auction to accommodate increased solar penetration in the grid. To encourage adoption of BESS for rooftop solar, we reckon financial incentives for residential and C&I BESS installation could be introduced.
- Solarvest has teamed up with Canadian investment giant Brookfield to develop 1.5 gigawatts (GW) in renewable energy projects in Malaysia. Over the next three to five years, the two companies would be looking at both large-scale hybrid solar power plants and battery energy storage system projects.
- Solarvest and Press Metal Aluminium Holdings Bhd’s special purpose vehicle, Mukah Solar Powerplant Sdn Bhd (MSPSB), has signed a RM380 million power purchase agreement (PPA) with Sarawak state-owned Syarikat SESCO Bhd. The agreement is for the development of a 100 megawatt alternating current (MWac) solar photovoltaic (PV) plant in Mukah.
3. KPJ
- We expect the Malaysian Healthcare Travel Council (MHTC) to receive an allocation of approximately RM30–40mn in Budget 2026. This would support the continued growth of medical tourism, benefiting private healthcare providers such as IHH and KPJ, for whom medical tourism contributes around 13% and 6% of total revenue, respectively.
- Looking ahead, the government aims to implement a national Diagnosis-Related Groups (DRG) payment system by mid-2026 but the near-term impact could be minimal as the initial roll-out is expected to target lower-value treatments or minor illnesses.
- KPJ's efforts to upgrade hospitals into tertiary and quaternary care centres should also allow it to capture more complex procedures and lift revenue.
- It is optimistic of a total 4,400 beds (+13% YoY) by end-CY25. Beyond CY25, it will add 800 beds bringing total beds to 5,200 over the next five years, largely via brownfield expansion.
For more info can refer back to my previous articles:
4. IJM
- As the first budget under 13MP, we expect Budget 2026 to reaffirm the government’s commitment to major infrastructure programmes that anchor long term growth. In line with 13MP, projects such as LRT3, RTS Link, and the ECRL are likely to feature prominently. Beyond these, progress updates on the MRT3, Penang LRT Mutiara Line Packages 2 & 3, Penang Airport expansion, Phase 2 of the Pan Borneo Highway, Sabah-Sarawak Link Road, Subang Airport redevelopment, and the Johor ART, could also be highlighted.
- Expect the data centre boom to persist for at least the next two years and maintain our assumption of 700MW new capacity annually, equivalent to approximately RM21b in construction contract value annually. At least three more data centre tender results are anticipated before year-end, while the upcoming Sabah State Election should accelerate infrastructure awards in the state.
- In May-25 IJM secured government approval for the RM1.40b (GDC) New Pantai Expressway Extension (NPE2), a 15km elevated highway to be undertaken by its Infrastructure Toll Division.
- On 27 August 2025, IJM signed a Supplemental Concession Agreement (SCA) with the Government of Malaysia, formalising the concession extension and restructuring. The SCA includes the construction of a new Syed Putra Toll Plaza and approval for a revised toll rate structure, which is expected to save the Government approximately RM191.0m in compensation payments.
For more info can refer back to my previous articles:
5. MRDIY
- Budget 2026 is expected to advance Malaysia’s social protection agenda by expanding cash transfer programmes such as the Sumbangan Tunai Rahmah (STR) and Sumbangan Asas Rahmah (SARA). In 2025, the government raised allocations for STR and SARA to RM15bn to support spending on household essentials.
- The Ringgit is projected to strengthen slightly to an average of RM4.10 against the US dollar in 2026 which will reduce MRDIY cost.
- EMPLOYEES PROVIDENT FUND BOARD keep buying recently, until 30 Sept 2025 already accumulate 905,733,042 units, which is 9.559%.
- Management's plans to open 190 new outlets across Mr DIY and KKV brands, with the bulk opening in the second half of the year.
- According to Retail Group Malaysia (RGM), mini-markets and convenience stores grew 11% as shoppers shifted toward cheaper, proximity-based options.
- MRDIY has 125 stores under the SARA merchant network, positioning them to capture increased footfall and transaction volumes.
6. CMSB
- Budget 2026 is expected to prioritise rural infrastructure development as a key driver of inclusive growth and fiscal resilience. Investments will focus on expanding rural roads, treated water facilities, electricity grid extensions, sewerage systems, and high-speed broadband particularly in Sabah & Sarawak.
- In Budget 2025, the emphasis is on basic infrastructure and connectivity with allocations of RM5.9bn for Sarawak. For the upcoming Budget, we expect East Malaysia to once again be a key beneficiary, with potential allocations for the remaining phases of the Pan Borneo Highway in both Sabah and Sarawak and target rural roads of 2,800 km, an upgrade plan, water supply, schools, and flood mitigations improving living standards.
- The earnings outlook for Cahya Mata Sarawak Bhd (CMSB) remains positive, supported by the reconnection of electricity supply to its phosphate plant in Samalaju Industrial Park. The phosphate division is expected to contribute positively from FY26 onwards, with CMSB's long-term gross profit guidance of about RM150 million.
- Sarawak's record-high RM15.8 billion budget for 2025, nearly 70 per cent of which is earmarked for development expenditure, along with its ambitious Post Covid-19 Development Strategy 2030 (PCDS 2030) ahead of its next election, which must be held by April 2027. Under PCDS 2030, Sarawak aims to become a developed, high-income state by 2030, with a gross domestic product target of RM282 billion, up from RM136 billion in 2019, implying an annual growth rate of around eight per cent.
- CMSB the sole integrated cement producer in Sarawak and recently secured a RM550 million contract to build the Borneo Convention Centre II. The company is also expanding clinker production capacity at its Mambong Integrated Plant and holds road maintenance concessions covering 3,300 kilometres of state roads until 2029.
7. RCECAP
- In the public sector, the second phase of the Public Service Remuneration System (SSPA), effective 1 January 2026, provides a 7% salary increase for civil servants in the Implementation, Management, and Professional groups and 3% for Senior Management, with similar adjustments for pensioners. Under Phase Two in 2026, the new minimum will further increase to RM2,327, providing an additional lift to disposable income.
- Bank Negara Malaysia (BNM) had recently cut the OPR by 25bps. This will have a slight positive impact to interest expenses on RCE's revolving credits, which form 30% of the group's financing liabilities base.
- RCE has been working closely with various co-operatives and foundations to provide shariah-compliant and conventional financing to their members who are mainly government employees. The repayments are done through a Salary Deduction Scheme. Thus, higher salary from civil servants enabling higher financing eligibility.
8. SIMEPROP
- Real Estate and Housing Developers’ Association (Rehda) president Datuk Ir Ho Hon Sang said property launches in Malaysia fell 26 per cent to 12,938 units in the first half of 2025, from 17,404 in the second half of 2024. Loan rejection rates were highest for homes priced between RM300,000 and RM500,000, categorised as affordable units.
- The Real Estate and Housing Developers' Association (Rehda) and the Master Builders Association Malaysia (MBAM) are calling for measures to ease housing affordability, lower construction costs, and promote sustainable development under the upcoming Budget 2026. At the same time, Rehda is urging the government to revive the Home Ownership Campaign (HOC) with targeted incentives, including extending it until Dec 31, 2026.
- Anticipate significant announcements in the housing sector. Under the 13th Malaysia Plan, the government has committed to building one million affordable housing units between 2026 and 2035, through collaboration between federal and state agencies and private developers. Initiatives like the Housing Credit Guarantee Scheme, Rent-to-Own schemes, and the Kota MADANI model for affordable urban development are all expected to feature prominently.
- Anticipate further enhancements to Rent to Own (RTO) schemes, tiered interest rates, and flexible tenures for first time buyers. Importantly, the current full stamp duty exemption on first homes priced up to RM500k, introduced under Budget 2021 and set to expire on 31 December 2025, is likely to be extended under House Ownership Campaign (HOC) 3.0. This exemption, which covers both the instrument of transfer and the loan agreement, has been a key affordability driver for the B40 and M40 segments.
- Public Private Partnerships (PPPs) will likely play a central role in delivery, particularly on Federal and state land. SIMEPROP stand out as potential beneficiaries of large-scale PPP led housing projects.
- Build-Then-Sell (BTS) model, which will test developers’ funding capacity and delivery agility. We expect Budget 2026 to provide transitional measures to ease this adjustment. Possible incentives include tax reliefs on financing costs, government-backed guarantees to improve access to project loans, or a phased implementation schedule based on project size and value. Build-Then-Sell (BTS) model will more benefit larger, well-capitalised developers.
- As of 30 June 2025, the net gearing ratio SIMEPROP only 30.9%, driven by funding requirements to expand assets under management (“AUM”) in support of recurring income growth.
- SIMEPROP has achieved 56% of its RM3.6b sales target as of mid-year. Given its historically stronger second-half seasonal performance, the group may well exceed its FY24 sales achievement of RM4.1b.
- According to TNB, the latest total ESA commitment among the DC players has increased to a total of 6.7 GW as of August 2025, whereas 3.5 GW has been completed along with another 3.2 GW in the pipeline. Subsequently, assuming the construction cost for DC amounting to approximately RM30mn per MW, this 3.2 GW in the pipeline will potentially imply a gross contract value of RM93bn for the next few years.
- EG Industries is set to capitalise on the data centre (DC) and artificial intelligence (AI) boom, underpinned by a strong customer base that includes leading players in network switches and 5G photonics products.
- As the first firm in South-East Asia to make 800G optical modules, a critical component at the front end of the AI value chain, EG enjoys exclusive high-value product mandates with Cambridge Industries Group (CIG). EG will produce 50% of CIG’s 800G and 1.6T output, with 800G demand projected to quadruple over 2024-2025 and 1.6T to double over 2024-2026, driven by Nvidia, Google, and other hyperscalers.
- EG began producing network switches for a leading China-based telecommunications equipment provider, benefiting from the global shift of production out of China.
- EG has signed its third letter of intent (LOI) with Shanghai-based optical and broadband technology firm Cambridge Industries Group (CIG) to expand its manufacturing operations in Batu Kawan, Penang to enhance production capacity by adding high-speed surface mount technology (SMT) lines, expanding cleanroom facilities from 1K to 10K standards for optical modules, and increasing automation in testing and packaging.
- FY2025 also marked the commencement of operations at the company's flagship Batu Kawan Smart Factory 4.0, which began production in June 2025. With pre-operation costs now behind us, this milestone positions us to scale new heights as the facility ramps up, driving future revenue and earnings to surpass even this year’s record-breaking performance. Batu Kawan will be the engine of next phase of growth, enabling us to manufacture more advanced components at greater efficiency and scale.
- According to Grand View Research, the 5G optical module (or optical transceiver) market is experiencing explosive growth, fuelled by surging demand for high-speed 5G infrastructure, AI- driven DC expansion, and hyperscale cloud computing. The market was valued at USD 1.32bn in 2022, and is projected to grow at a CAGR of c.29.9% from 2023 to 2030, reaching approximately USD10.9bn by 2030.
Disclaimer : The above opinion is never intended to be a BUY SELL CALL. The above article purely for education purpose base on observations, chart and data. Thank you.
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