Malaysia equity strategy – Budget 2027: wage reforms in focus

Nomura's Malaysia equity strategy note analyzes the equity market implications of the 2027 budget presented by Prime Minister Anwar Ibrahim on 9 October 2026. The minimum wage rises ~18% to MYR2,000 from MYR1,700 effective June 2027, and Nomura's sensitivity analysis across the plantation, construction, technology, gloves, consumer, utilities, materials, industrials and energy sectors shows an estimated annualized earnings impact ranging from -0.1% to -5.8% (direct impact only), widening to -0.2% to -7.6% including cascading wage adjustments. Glove manufacturers appear most exposed, while Energy/Materials/Industrials are relatively least affected. The fiscal deficit narrows to 3.3% of GDP in 2027 (vs 3.6% in 2026). Consumer spending power is a major beneficiary via STR/SARA allocation of MYR16bn, personal income tax cuts and higher tax relief limits, benefiting 99 Speed Mart, Eco-Shop Marketing, MR DIY and Farm Fresh. Property benefits from broadened tiered stamp duty relief (up to MYR