Technology also received a large allocation of the budget particularly to accelerate the deployment of 5G in the country through a RM50million grant.
There were also initiatives to propel the use of e-wallet via a RM30 seeding incentive to qualified Malaysians aged 18 and above with annual income less than RM100,000 as the economy evolves towards a cashless society.
On a fiscal level, the government revised its Budget 2020 deficit target to 3.2% of GDP, which is slightly higher than the 3% originally announced in Budget 2019.
Sectors in the SpotlightIn terms of impact, the budget was market-neutral with no immediate catalysts that could drive Bursa higher for now.
The absence of any pump-priming measures or announcement of mega infrastructure projects came as a disappointment to the construction sector.
The consumer sector could benefit incrementally over time as the trickle-down effects of job creation, allocation of social subsidies to address high cost of living will help spur consumption.
Allocation for subsidies and social assistance were increased to RM24.2 billion including welfare aid such as Bantuan Sara Hidup (BSH). The government also proposed to raise the minimum wage in urban areas to RM1,200 per month in 2020.
Another sector seen as a beneficiary include the technology sector via grant incentives and also measures to boost adoption of e-wallets. Other incentives including a 50% matching grant to increase the digitalisation of operations for SMEs and for technology entrepreneurs.
We remain neutral on the property sector as the measures outlined are not expected the move the needle in boosting demand and elevating the oversupply overhang in the market in a meaningful way.
No new tax measures or duties announced in the budget for the sin sectors was also positive for gaming, tobacco and brewery players especially for the latter two which has been assailed by the illicit market.