Financial aid, subsidies to B40 and civil servants to benefit consumer sector — Midf Research

The consumer sector will benefit from the continued assistance provided in the revised Budget 2023, MIDF Research said.

The research house said various financial aid, subsidies and initiatives provided to the B40 (bottom 40%) income group, and the civil servants will support domestic demand and boost consumer spending on essential items.

“As such, we anticipate that the cash assistance will boost sales for consumer-staple-related companies,” it said in a note on 25th February.

 As domestic economic recovery continues, Malaysia’s private consumption expenditure is expected to increase steadily by 6.1% in 2023 (first edition of Budget 2023: 6.3%), it said.

“Continuous recovery in labour market, improving income growth and strengthening of tourism activities amid China’s reopening will fuel private consumption and domestic demand,” it added.

The Rahmah cash aid (STR) programme for the B40 totalling nearly RM8 billion and special financial assistance to civil servants and government pensioners would support household spending especially in the first half of 2023, MIDF Research said.

“On top of that, the government lends extra support for consumer demand via individual income tax cut by 2% particularly for those with an annual income of RM50,000-RM100,000 per annum,” it noted.

On the proposed capital gains tax on the disposal of non-listed shares, MIDF Research said it may attract more listings.

“Moreover, the Securities Commission would facilitate more secondary market for private market instruments to improve liquidity and enable better price discovery,” it added.