Latest news with #RM2bil
The Star
19 hours ago
- Business
- The Star
Consumer sector to gain
PETALING JAYA: Analysts from research houses and fund managers appear to be largely positive on the 'Appreciation Package' unveiled by the Madani government on Wednesday, generally agreeing it would provide a short-term boost to the consumer sector. In addition, they see the benefits likely cascading down to tourism-related industries such as hotels and restaurants, as well as the food and beverage (F&B) sector. In a strategy report to clients, Hong Leong Investment Bank Research (HLIB Research) reported that the RM100 cash handout is estimated to benefit 22 million Malaysians, involving an allocation of RM2bil. 'As a result, the total allocation for Sumbangan Tunai Rahmah (STR) and Sumbangan Asas Rahmah (Sara) has increased from RM13bil to RM15bil for this year,' the research house said, adding that the government remains committed to implementing targeted subsidies for RON95 petrol, with full details to be announced by the end of September. The research house anticipates that the one-off RM100 cash transfer and lower RON95 petrol price for the majority of Malaysians should increase private consumption growth by approximately 0.2 percentage points. With regards to the potential impact on the country's fiscal deficit, HLIB Research said the additional cash transfer of RM2bil translates to 0.1% of gross domestic product (GDP), as it also highlighted that the government is also expected to experience some increase in subsidy spending from lowering the subsidised price for RON95 from RM2.05 per litre to RM1.99. Nevertheless, it said this is expected to be fully offset by the government's targeted subsidy rationalisation plan, lower oil prices and stronger ringgit. 'At the same time, the government had already implemented the sales and services tax (SST) expansion on July 25 with a target of RM5bil – representing 0.2% of GDP – as additional revenue for 2025. 'Taking all this into account, we maintain our fiscal deficit projection of minus 3.8% of GDP, up from the minus 4.1% of 2024,' said the research house. Notably, HLIB Research said 99 Speed Mart Retail Holdings Bhd and Aeon Co (M) Bhd would benefit from the handouts, maintaining its 'buy' call for both companies with respective target prices of RM2.98 and RM1.82. It said 99 Speed Mart, with 2,800 outlets nationwide and an average basket size of RM21.40, is particularly well positioned to capture recurring spend from consumers using Sara credits, while Aeon, with its urban footprint and diversified merchandise, may see uplift from middle-income segments with improved purchasing sentiment. Head of dealing at Moomoo Malaysia, Ken Low, sees consumer staples, F&B, and fast moving consumer goods as the most immediate beneficiaries, before adding that the RM100 cash transfer, wage hikes, and expanded living wage coverage put more cash into lower-and middle-income hands. 'This typically translates into spending on groceries, essentials, and value-tier offerings. We also see telecommunications and quick-service F&B as near-term winners, especially in prepaid-driven or convenience-focused segments,' he told StarBiz. However, he cautioned that the upside may be short-lived unless sentiment is sustained, suggesting investors to focus on companies with pricing power, efficient cost structures, and strong reach in the value-for-money space. From a foreign investor perspective, Low believes that Malaysia's recent ringgit strength, competitive index climb, and solid investment flows suggest that confidence is returning, not because of spending, but because of clearer policy direction. 'That said, execution remains key, as markets are likely to stay selective until the full impact of fuel subsidy reforms is known. 'In our view, the bulk of the 'relief rally' sentiment is already priced in, what investors need next is proof of reform credibility and growth delivery,' he said. Of interest, while selecting popular consumer players such as 99 Speed Mart, Farm Fresh Bhd and Padini Holdings Bhd among its top picks for the sector, with respective target prices of RM2.60, RM2.25 and and RM2.55, CIMB Research is keeping its 'neutral' call on the industry. Explaining from a broader technical view, it said the consumer sector is currently trading at 27.2 times one-year forward price-over-earnings (PE), slightly over one standard deviation below its five-year mean of 29.1 times. 'We believe valuations are fair at this juncture, reflecting ongoing soft consumer sentiment and higher sales tax on discretionary goods, on top of the impact of boycott activities on selected consumer names, and cost pressures from the expanded SST on rental costs,' it added. Meanwhile, aside from familiar consumer names such as Fraser & Neave Holdings Bhd at a target price of RM32.68 and Life Water Bhd at RM1, MBSB Research has also picked Pavilion Real Estate Investment Trust (REIT) at 1.88 and Petronas Dagangan Bhd (PetDag) at RM22.25, respectively, as its picks in the REIT and oil and gas industries. The research house expects the RM100 cash handout to be positive for retail REITs as it will increase disposable income of the public, improving shopper footfall and tenants' sales of shopping malls. Additionally, it believes the demand for RON95 will remain supported due to continuous utilisation for fossil fuel out of necessity. 'While the margins for the dealers through a two-tiered pricing system due to the targeted subsidy are yet to be disclosed, PetDag is expected to be compensated for selling the fuel below market price to eligible consumers, while higher margins are anticipated for the unsubsidised fuel sold to ineligible recipients. 'Initial risks may persist in terms of uptake and utilisation post-implementation of the RON95 targeted subsidy, although we believe PetDag still has the upper hand to mitigate them,' said MBSB Research. Meanwhile, Tradeview Capital chief investment officer Nixon Wong said the declaration of a special public holiday on Sept 15 may provide a temporary boost to domestic tourism, as the extended four-day weekend encourages travel and leisure spending. He told StarBiz the 'Appreciation Package' could shift public and investor perception of the current administration's fiscal stance, which has so far been seen as focused primarily on subsidy rationalisation and financial consolidation. Wong said the move may signal a more balanced approach – one that still accommodates short-term support for the rakyat while preparing for structural reforms. 'It could also lay the groundwork for greater market optimism ahead of Budget 2026, particularly in anticipation of further handouts or potential infrastructure allocations,' he added. Meanwhile, an analyst with a foreign research outfit opined that QL Resources Bhd may also stand to gain as a major player in consumer staples, including poultry and convenience store chains, which could see higher sales due to increased foot traffic and spending on essentials. She projected that automotive players MBM Resources Bhd and Bermaz Auto Bhd will also likely benefit from lower RON95 fuel prices that will reduce operating costs for vehicle owners, particularly for the middle and lower-income groups. 'At this juncture, it seems natural that the biggest winners are consumer-facing and infrastructure-related sectors. While these measures are pro-rakyat, the government's long-term credibility also depends on how well they are balanced with fiscal reforms. 'Foreign investors may not react negatively now – but they are watching if this trend continues into 2026, and whether it will be coupled with structural revenue growth or fiscal sustainability,' she said.
The Star
18-07-2025
- Business
- The Star
Move to streamline 12 million addresses nationwide
Addressing issues: Fahmi (right) and his deputy Teo Nie Ching at the Malaysia Address Conference in Kuala them are Principal Assistant State Secretary Maznah Mahat (left). — SAMUEL ONG/The Star KUALA LUMPUR: A unified National Address System (NAS) that will streamline more than 12 million addresses nationwide is set to be rolled out soon, a move aimed at tackling long-standing issues of inaccurate and inconsistent address data across the public and private sectors. Communications Minister Datuk Fahmi Fadzil said the significant reform, mooted by Prime Minister Datuk Seri Anwar Ibrahim, would resolve the widespread discrepancies in address information used by various agencies and organisations. 'The core focus of the NAS is to ensure that every address in Malaysia is identifiable and traceable through accurate means,' Fahmi said after launching the Malaysia Address Conference 2025 yesterday. He explained that the NAS will serve as a centralised and standardised database for both government agencies and businesses, enabling more efficient coordination, faster deliveries, and improved emergency response times. Currently, various agencies and businesses rely on different address databases, which often leads to inefficiencies and inaccuracies, he said. Fahmi added that the reform is projected to generate RM2bil in economic spillover and create more than 2,000 jobs over the next five years, particularly in sectors related to address management, based on analysis by the Malaysian Communications and Multimedia Commission. The system, he said, would not only improve day-to-day operations but also prove critical during disasters such as floods, where precise location data is vital for identifying affected areas. While centralising addresses may appear mundane, Fahmi stressed that the implications are far-reaching. 'When I first took office, I didn't think this was a pressing issue. But after multiple discussions, I discovered just how fragmented our address systems are. A single person or entity might have different addresses. 'Every address should belong to its rightful owner. The many agencies out there do not have standardised information, and this has led to significant issues in daily dealings, such as delays or failed deliveries,' he said. The government has spent about RM700mil to date on geospatial and navigation services to obtain location information outsourced from third parties.
The Star
17-07-2025
- Business
- The Star
National Address System will boost economy and employment, says Fahmi
KUALA LUMPUR: The National Address System (NAS) initiative, which will centralise and streamline more than 12 million addresses nationwide, is expected to generate an economic spillover of RM2bil and create more than 2,000 job opportunities over the next five years. Communications Minister Datuk Fahmi Fadzil said this was indicated in an analysis by the Malaysian Communications and Multimedia Commission (MCMC) involving sectors related to addressing activities. He said complicated and inconsistent addresses will soon be a thing of the past when the addressing system, the brainchild of Prime Minister Datuk Seri Anwar Ibrahim, is rolled out. ALSO READ: Malaysia aims to launch National Address System in 2026, experts urge tech use to bridge gaps "The core focus of the NAS is to ensure that every address in Malaysia is identifiable and traceable through accurate means. "The system is built to be utilised by various government agencies and businesses, improving coordination, delivery and response times across the board," he said after launching the National Address Conference 2025 here on Thursday (July 17). Fahmi said it was a significant reform in national address management, as various agencies and business entities operate using different address databases, which may lead to inefficiencies and inaccuracies. He said the NAS will eliminate these inconsistencies and enable accurate and integrated service delivery across all sectors. "This unified and centralised database of an initial 12 million addresses will benefit all government agencies and business entities, and is expected to grow in numbers with new developments. "As such, local councils play a crucial role as they are closest to the public and are directly involved in the oversight of planning and development in their respective areas," he said. A foreign company has been commissioned to build the NAS at a total cost of RM700mil.
The Star
15-07-2025
- Business
- The Star
Solarvest on track for strong FY26
Phillip Research said the company's management remained committed to further growing its order book to surpass RM2bil in FY26. PETALING JAYA: Solarvest Holdings Bhd is poised to chart another record showing for its financial year 2026 ending March 31 (FY26), due to, among other things, its strong engineering, procurement, construction, and commissioning (EPCC) order book. Phillip Research said it expects FY26 to be another record earnings year for the company supported by its robust RM1.2bil outstanding EPCC order book, comprising RM486mil worth of Corporate Green Power Programme projects, RM504mil in the fifth phase of the government's Large-Scale Solar (LSS5) projects, as well as RM252mil in residential, commercial and industrial projects. In a recent meeting, the research house said the company's management remained committed to further growing its order book to surpass RM2bil in FY26, underpinned by replenishment opportunities arising from LSS5, LSS5+ and the rolling out of battery energy storage systems. Solarvest has already secured a 30% share of the total two gigawatt (GW) capacity under LSS5 and is currently in active negotiations to finalise additional EPCC contracts by the third quarter of this financial year (3Q25), which could potentially lift its share to between 40% and 50%, the research house added. 'Looking ahead, the upcoming LSS5+ project is expected to introduce a further two GW of quota into the market, with bid finalisation anticipated by July 25, and EPCC contract awards commencing in 1Q26. 'Backed by a strong track record for execution in the LSS programme and robust bidding advisory capabilities, we anticipate Solarvest to maintain its 30% market share in LSS5+.' This includes the group's newly secured LSS5 projects and its Brunei solar venture, said the research house. 'The group now has a 334 megawatt pipeline of solar assets, targeted to be operational by FY28,' the research house said. Maintaining a 'buy' call on Solarvest with a higher target price of RM3.05, Phillip Research said it continues to like the company for its leading position in the solar-energy sector and for being a key beneficiary of the nation's energy-transition goals. Key downside risks include changes in the government's renewable-energy policy, project execution delays, intense market competition, and volatility in solar module prices.
The Star
12-07-2025
- Business
- The Star
ECRL project hits major milestone
Mega build: Loke officiating the Genting ECRL Project Tunnel excavation works ceremony in Bentong, Pahang.— MUHAMAD SHAHRIL ROSLI/The Star Breakthrough of Genting Tunnel sets regional railway record BENTONG: Malaysia's major infrastructure project, the East Coast Rail Link (ECRL), has reached a significant milestone with the breakthrough of the 16.39km Genting Tunnel – a new regional record. Transport Minister Anthony Loke said the Genting Tunnel is set to become the longest railway tunnel in South-East Asia upon its completion. 'It will certainly complement international trade by boosting export-oriented industries and making Malaysia more attractive to businesses,' he said at the breakthrough ceremony yesterday. 'Its last-mile connectivity between Kuantan Port and Port Klang will bring the east and west coasts closer together and ease the transfer of goods along the ECRL network.' Loke said the tunnel breakthrough symbolises not only a major engineering achievement but also the fruitful collaboration between Malaysia and China. This milestone, he added, also reflects the strong cooperation among ECRL personnel at all levels, particularly in managing excavation works across the 41 tunnels along the rail alignment. 'The ECRL is also touted as a game changer for the movement of passengers and freight in Peninsular Malaysia. It will link state capitals, key urban centres, industrial hubs, seaports, airports, and tourism zones while integrating with existing railway lines along its corridor,' he said. The Genting Tunnel has also been officially recognised in the Malaysia Book of Records for two achievements: being the longest railway tunnel and having the highest overburden. Speaking at a press conference later, Loke noted that the tunnels were designed with environmental considerations in mind, especially in traversing the Titiwangsa mountain range. 'The tunnels also reduce the need for cutting down trees,' he said. Loke also praised the strong partnership with China, stating that the project's deliverability had been clearly demonstrated. On plans to extend the ECRL to the Malaysian-Thai border, Loke said the proposal is under consideration. 'The distance from Kota Baru station to the border is about 32km. We are looking into the plan, but it is still at the study and proposal stage at the ministerial level,' he said, adding that the proposal may be tabled for Cabinet approval next year. The estimated cost of the extension is around RM2bil. The ECRL project, with a total estimated cost of RM50.27bil, spans 665km and will feature 20 stations across Peninsular Malaysia. The first phase, stretching from Kota Baru, Kelantan, to the Gombak Integrated Terminal in Selangor, is expected to be completed by December 2026 with operations slated to begin in January 2027. Phase Two, connecting Gombak to Port Klang, is scheduled for completion by December 2027 and is expected to be fully operational by January 2028.
