PENJANA TO RESTORE ECONOMY, AUTOMOTIVE THE BIGGEST WINNER: AMINVEST

KUALA LUMPUR, June 6 -- The short-term National Economic Recovery Plan (PENJANA), which spans June to December 2020, will help restart the economy after a soft patch amid the Movement Control Order (MCO) and Conditional MCO over the last three months to contain the COVID-19 pandemic.

AmInvest, in its research note today, said the third stimulus instalment in response to the pandemic, which is worth RM35 billion, would continue to save lives and livelihoods especially in helping the low-income and disadvantaged groups to tide through these challenging times.

“It would also restore and revitalise businesses, and aid the economy in adapting to the new normal such work from home, social distancing and digitalisation, including e-commerce and remote learning, while steering the economy back to the growth path,” the fund manager said.

bootstrap slideshow

On the sectoral side, it said the biggest winners of the plan were the automobile sector and car buyers with a 100 per cent and 50 per cent sales tax (SST) exemption on completely knocked-down locally assembled and completely built-up fully imported car models. 

“Based on our channel checks, the 100 per cent SST exemptions will result in a reduction of seven to eight per cent of CKD car prices, while the 50 per cent SST exemptions will reduce CBU car prices by three to four per cent,” AmInvest said.

The investment bank has also upgraded the auto sector to “overweight” from “neutral” with a 60,000 increase in total industry volume projection to 580,000 units for 2020.

“We strongly believe that prices of entry-level locally assembled passenger vehicles are poised to be more attractive with Proton and Perodua to continue to lead the way in 2020 due to its value propositions,” it said.

-- BERNAMA