Malacca Securities Backs TNB’s RM15bn Grid Plan Post-Budget

Malacca Securities Research has kept utilities on its radar after Budget 2027, pointing to TNB’s RM15bn grid investment as the backbone of its post-Budget call. The research house noted that optimism over the Budget tabling lifted Bursa Malaysia last Friday, with the Construction sector up 2.30%, led by GAMUDA and SUNCON.

Market Backdrop Behind the TNB Utilities Call

Gains in YTLPOWR and PMETAL helped carry the benchmark higher, while the Health Care sector slipped 0.75% and lagged the most. Overseas, the Dow rose 0.8%, the S&P 500 gained 0.6% and the Nasdaq advanced 0.6% as tech shares rebounded.

Malacca Securities also flagged the US September CPI release on Wednesday as a key test. Hotter inflation could revive rate-hike expectations at the October FOMC meeting, while major US banks begin their 3Q26 earnings season.

Why Malacca Securities Favours Utilities After Budget 2027

The research house stated that it continues to favour the utilities sector after the Budget tabling. Its thesis rests on TNB’s RM15bn grid investment, which it says will support transmission and distribution infrastructure across the country.

According to Malacca Securities Research, MNHLDG, SCGBHD and PWRWELL are the names that could benefit from that grid spending. Separately, the research house linked a RM2.5bn National NRW Reduction Programme, targeting 1,900km of ageing pipes, to IAB.

TNB Grid Spend and Other Policy-Linked Plays

The research house also highlighted higher STR and SARA allocations of RM16bn, up from RM15bn in 2026, which it views as positive for 99SMART. These budget-linked allocations give the utilities theme more than one policy anchor beyond TNB.

Malacca Securities expects the post-Budget phase to be less volatile than the recent sell-off in the broader index. The distinction matters because TNB’s grid programme is multi-year infrastructure spend rather than a one-off allocation.

Valuation Basis and Risks Flagged

The summary excerpt does not spell out the valuation methodology behind the research house’s stock views, so readers should consult the full report for the target price basis. It does, however, outline the market risks it is watching closely.

The research house sees limited risk of significant post-Budget profit-taking, because the FBMKLCI has already corrected over the past month. Pressures cited include surging US Treasury yields and uncertainty over a possible expansion of the index to 50 constituents.

What This Means for Retail Investors

For retail investors, the report is a map of where Malacca Securities Research sees policy-linked spending flowing, not a trading instruction. The distinction between the TNB thesis and the overseas tech and AI names mentioned in the same report is worth keeping in mind.

The full report is available from M+ Online, and it should be read in full before any decision. Each investor’s time horizon, risk tolerance and existing exposure will shape how these views apply.

Key Takeaways

• Malacca Securities Research continues to favour utilities after Budget 2027, citing TNB’s RM15bn grid investment.
• The research house links MNHLDG, SCGBHD and PWRWELL to the grid spending theme.
• IAB is tied to a RM2.5bn NRW Reduction Programme covering 1,900km of pipes.
• 99SMART is linked to STR and SARA allocations of RM16bn, up from RM15bn in 2026.
• The numeric TNB target price is not in the summary and must be checked in the full M+ Online report.

Frequently Asked Questions

What is Malacca Securities’ call on TNB?

Malacca Securities Research says it continues to favour utilities after Budget 2027, with TNB’s RM15bn grid investment supporting transmission and distribution infrastructure. The summary does not state a numeric TNB target price, so the valuation should be checked in the full M+ Online report.

Which other stocks did Malacca Securities link to the utilities theme?

According to the research house, MNHLDG, SCGBHD and PWRWELL could benefit from TNB’s grid spending. IAB is linked to a RM2.5bn NRW Reduction Programme, and 99SMART to STR and SARA allocations of RM16bn.

Does Malacca Securities see a high risk of profit-taking after Budget 2027?

The research house sees limited risk of significant post-Budget profit-taking, since the FBMKLCI has already corrected over the past month. It cited surging US Treasury yields and uncertainty over a possible expansion to 50 constituents as the backdrop.

Disclaimer: This article is for informational and educational purposes only and does not constitute financial advice or a recommendation to buy or sell any security. Ratings and target prices cited are those of Malacca Securities Research and are subject to change. Always do your own research before making investment decisions.

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