Market expected to trade sideways as investors assess budget implications

The FBM KLCI rose slightly by 0.3%, supported by optimism around the recently tabled Budget 2025, while lower-tier stocks also gained and the Technology sector led with a 1.4% increase.

Global Markets Review:

• U.S. markets climbed, especially driven by technology stocks, with Netflix jumping 11% due to higher-than-expected subscriber growth.

• European stocks extended their gains.

• Asia-Pacific markets rose following China’s better-than-expected 3Q24 GDP growth of 4.6% year-over-year.

Market Outlook:

• The Malaysian stock market is expected to trade sideways as investors assess the implications of Budget 2025. A 2% tax on dividend income over RM100,000 could negatively impact equities.

• Lower-tier stocks may experience volatility, while the construction sector is poised to benefit from infrastructure projects funded by the RM86 billion allocated in the budget.

• Investors in the plantation sector might lock in profits due to margin pressures from rising wages and export duties, despite a minimal positive impact from the higher windfall profit threshold.

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