Budget 2025 marks a pivotal moment for Malaysia’s economic growth, laying the groundwork for growth in strategic sectors like tourism, logistics, real estate, and clean energy. Following the announcement, the FBMKLCI responded with a surge of 12.44 points, reflecting investor optimism that key reforms will catalyse sustained growth across the Malaysian economy. This is also evidenced by buying outpacing selling by 13.6%* on the platform this week.

Tourism – Building Momentum Towards 2026

Tourism-related industries are poised to benefit significantly from increased funding for infrastructure upgrades and promotional efforts aimed at boosting both international and domestic travel ahead of Visit Malaysia 2026. This optimism is reflected in the broader Consumer Products and Services sector, which saw 327.50 million shares traded on the Main Market​. Hospitality REITs, airlines, and leisure companies are expected to gain from these developments as consumer demand recovers, presenting attractive opportunities for investors.

Logistics – Strengthening Supply Chains

Budget 2025’s emphasis on transportation infrastructure development is also expected to uplift the logistics sector. With 27.66 million shares traded in the Transportation and Logistics Index, this sector reflects strong investor interest, likely driven by expectations of enhanced trade flows and more efficient supply chains​. E-commerce firms and logistics providers are positioned to see improvements in operational margins as infrastructure upgrades progress, aligning with Malaysia’s strategy to remain a competitive trading hub in the region.

Real Estate – Affordable Housing and Sustainability Initiatives

The budget’s focus on real estate includes affordable housing initiatives, with tax reliefs and support for first-time homebuyers through the Syarikat Jaminan Kredit Perumahan (SJKP) scheme​. These policies have already influenced trading in the Property Index, which recorded 222.46 million shares traded following the announcement. Real estate developers and property-focused REITs are anticipated to benefit from increased homebuyer activity and incentives for green building projects, creating a robust outlook for both residential and commercial sectors.

Clean Energy – Sustainability Leading the Charge

Clean energy remains a priority, with Budget 2025 allocating funds for renewable energy projects and incentives for electric vehicles (EVs). The Energy Index saw a slight increase of 2.73 points to 859.03 on October 24, 2024, reflecting renewed investor interest and market confidence. A total of 60.74 million shares were traded in the energy sector, showing steady engagement despite global volatility. Solar companies, EV infrastructure providers, and green technology firms continue to be well-positioned to capture significant value as sustainability investments accelerate. These positive developments align with Malaysia’s ongoing transition towards a greener economy, creating new opportunities for investors focused on clean energy technologies.

Seizing Opportunities in Key Growth Areas

Investor sentiment remains cautiously optimistic as Budget 2025 brings much-needed clarity on the government’s economic priorities. We anticipate the benchmark index will continue its sideways consolidation and is likely to trade within the 1,630 to 1,650 range next week. For those looking to invest, focusing on sectors like clean energy and logistics could offer medium to long-term growth potential. With Malaysia’s continued emphasis on sustainability, green energy stocks are worth monitoring closely. 

While optimism is high, challenges remain. The global economic landscape, marked by inflationary pressures and geopolitical tensions, could weigh on Malaysia’s export-driven sectors, especially logistics and manufacturing. Additionally, rising interest rates may dampen demand in the real estate market, affecting homebuyers and developers alike. Investors should remain vigilant and diversified in their strategies.

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