Malaysian Ringgit: Fiscal anchor case – MUFG
MUFG’s Lloyd Chan previews Malaysia’s Budget 2027, highlighting that prior fiscal reforms and subsidy rationalization provide a buffer against higher Oil prices. The report argues that disciplined budgeting, targeted household support and protection of development spending should sustain confidence in Malaysian Government Securities and the ringgit, reinforcing the structural case for Malaysian bonds and MYR despite global volatility.
Fiscal reforms support Malaysian assets
"Past fiscal reforms provide a timely buffer against the oil shock. Stronger revenues and RM15.5bn of annual subsidy savings should help cushion higher energy costs, allowing fiscal consolidation to slow rather than reverse."
"Budget 2027 should remain fiscally disciplined, with the focus shifting from new reforms towards execution. On revenue, stronger tax collection and SST broadening reduce the need for another major tax overhaul, putting greater emphasis on compliance and collection efficiency. On spending, consolidation should rely more on better targeting and efficiency than broad austerity."
"Household relief will remain necessary, but a return to blanket subsidies is unlikely. We expect support to remain targeted through BUDI MADANI, STR/SARA and other measures, cushioning the cost-of-living shock without structurally raising expenditure."
"Protecting development spending will be key to turning the investment boom into a productivity upcycle. We expect Budget 2027 to maintain or increase development spending, with priorities around human capital, connectivity, digital and industrial infrastructure, and energy capacity, helping translate investment into domestic value-add, productivity and higher real wages."
"Fiscal credibility should provide an anchor for MGS and MYR amid global volatility. If higher subsidies remain a temporary response to the oil shock while fiscal reform and productive investment stay on track, the Budget should reinforce the structural case for Malaysian bonds and the ringgit."
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
You may also like
BUZZ - RBC expects gradual improvement in North American and European building materials stocks in the third quarter
October 9 - RBC expects the performance of most European building material products to gradually improve quarter-on-quarter in Q3, but notes that geopolitical uncertainties in the US will continue to drive up cost inflation and increase market volatility. RBC anticipates that sales in Europe will remain sluggish due to heatwaves and rising mortgage rates, while a weak US housing market and the lack of a significant hurricane season will prompt roofing material companies to enter a destocking cycle. The firm is more optimistic about Germany’s Heidelberg Group (HEIG.DE), upgrading its rating to “outperform,” and points out that the company has handled the challenging quarter caused by extreme weather far better than its peers. Due to severe cost headwinds such as rising diesel and natural gas prices, RBC downgraded the ratings of US and French construction companies Knife River (KNF.N) and Saint-Gobain (SGOB.PA) from “outperform” to “market perform.” (For the convenience of non-English speakers, Reuters automatically translates its reports into several other languages. Since automated translations may contain errors or lack necessary context, Reuters does not guarantee their accuracy and provides them solely for the ease of the reader. Reuters assumes no liability for any damages or losses that may arise from the use of automated translation functions.)
3D printing materials supplier Amaero (AMRO.US) restarts US IPO, fundraising drops 60% to $20 million
Amaero (AMRO.US) on Thursday resumed its initial public offering (IPO) plans in the United States and filed new documents with the U.S. Securities and Exchange Commission (SEC), revealing a reduced number of shares to be issued.
Even with Eli Lilly's endorsement, TRex Bio (TRXB.US) struggles to enjoy a premium, as the issue price drops to the lower limit of $14.
Early-stage biotechnology company TRex Bio has priced its IPO at the lower end of the range at $14 per share, raising $116.7 million and achieving a market capitalization of $384 million. The company will be listed on Nasdaq on Friday, with Eli Lilly expressing interest in increasing its stake.
Small molecule biotechnology company Iambic Therapeutics (IAM.US) IPO priced at $15-17 per share, aiming to raise $150 millions.
Iambic Therapeutics plans to raise $150 millions by issuing 9.4 million shares, with an offering price range of $15 to $17 per share.
Crypto prices
More
