RMK13 unlikely to shift investor sentiment, says analyst

New Straits Times

2 days ago

KUALA LUMPUR: The 13th Malaysia Plan (RMK13), which is set to be tabled today, is unlikely to spark a major shift in investor sentiment, according to a market observer.
While the five-year national blueprint will set the tone for Malaysia's long-term economic trajectory, analysts believe its immediate influence on equity markets will be limited.
Tradeview Capital fund manager Neoh Jia Man said the plan is unlikely to trigger a significant reaction from either domestic or foreign investors.
"Such plans typically focus on the nation's long-term macroeconomic development, with limited details on short-term projects or measures.
"As a result, we believe the impact on investor sentiment will be minimal, given the equity market's inherent focus on short-term catalysts," he told Business Times.
Neoh added that the equity market tends to respond more actively to near-term developments such as corporate earnings, monetary policy shifts, or geopolitical risks, rather than long-horizon strategies like RMK13.
However, certain sectors are expected to benefit from the plan's strategic focus areas.
Neoh pointed out that the unity government is likely to maintain its emphasis on strengthening national competitiveness through advanced manufacturing, digital economy initiatives, and renewable energy development.
"Greater emphasis is also likely to be placed on infrastructure development in East Malaysia, aiming to address regional disparities.
"Lastly, we anticipate further clarity on ongoing fiscal reforms, which may extend beyond subsidy rationalisation and tax base expansion to include financial reforms in the public healthcare and water sectors," Neoh said.
In the short term, specific counters in the industrial and technology sectors may see renewed interest, particularly if fresh incentives are introduced.
However, this may be overshadowed by developments related to Malaysia's negotiations on the US reciprocal trade tariffs.
Neoh also flagged the possibility of renewed investor focus on construction stocks should the government signal the revival of major infrastructure projects.
"Companies with exposure to the renewable energy space or those involved in infrastructure development in East Malaysia could emerge as key beneficiaries," he added.
When asked about how investors have historically responded to previous Malaysia Plans, Neoh noted that reactions have generally been muted.
"Past Malaysia plans have generally been measured, due to limited policy detail and concerns over execution and continuity.