As an addition to our earlier article to the pre-announcement of the Prime Ministers speech, we will be highlighting the cores under the short term economic stimulus plan – PENJANA, there are 40 key initiatives worth RM35bn directed through 3 main cores; namely (i) Empower People, (ii) Propel businesses and (iii) Stimulate the Economy. Therefore, we will go through some of the salient points that will allow market participants to identify the potential beneficiaries and stocks related to that sector.
Economic Stimulus Plan
Empower People
Firstly, Empower People, the main objective is to save jobs and promote employment. The government will be providing these subsidies for SMEs and rakyat, enabling them to navigate through these unprecedented times after Covid-19 outbreak and MCO.
| Initiatives | Quantum & Beneficiaries | Impact |
| Hiring and Training Assistance for Businesses | RM1.5bn for 300k job seekers | Could spillover some impact to online/ e-learning |
| Reskilling and Upskilling Programmes | RM2bn for 200k youth and unemployed workers | Same as above |
| My30 public transport subsidy | RM200m, for 200k Malaysian public commuters, unlimited monthly travel pass from mid-June to end-Dec. | Slight negative for automotive sector as rakyat could delay the process of acquiring personal vehicles |
| PEKA B40 Healthcare support | RM50m for B40 aged 40 and above | Slight positive for healthcare sector |
Propel Businesses
Secondly, Propel Business, the government highlighted the importance of adopting digitalisation for corporates. Hence, e-commerce is being emphasised and we believe with the financing and liquidity provided, it could encourage the establishment of new businesses, translating to higher online transactions. For this matter, we like REVENUE and GPACKET for the online transaction and e-wallet exposure. Also, we believe transportation and logistics will be benefited in tandem with the e-commerce growth moving forward. Under this space, we like GDEX and POS.
| Initiatives | Quantum & Beneficiaries | Impact |
| “Shop Malaysia Online” for online consumption | RM70m for Malaysian MSMEs with e-commerce footprint and consumers | Benefit online payment providers |
Economic Stimulus Plan 3 – Stimulate The Economy
Under the third core of the Economic Stimulus Plan, Stimulate the Economy, several initiatives are set to encourage the consumption of local products and services. Most importantly, this would also attract international investors and venture capital funds into local venture capital space.
| Initiatives | Quantum & Beneficiaries | Impact |
| Digitalisation of Government Service Delivery | RM20m for Public | May spillover to e-Govt services providers |
| ePenjana Credits in e-wallet | RM750m for c.15m Malaysians | Benefit e-wallet players |
| Incentives for Property sector* | RM1bn for homeowners, property homebuyers | Slight positive for property stocks |
| Tax incentives for purchase of passenger cars | RM897m for automotive sector, consumer | Positive for automotive sector |
| Commodity Sector Support** | RM200m for commodity sector | Positive for CPO plantation companies |
For automotive stocks, trading interest was seen in UMW, DRBHCOM, BAUTO, MBMR and TCHONG and we believe these are some of the beneficiaries to the PENJANA plan to stimulate the economy
*Property sector incentives
- Tax exemption for purchase of properties: Reintroduction of Home Ownership Campaign (HOC). Stamp duty waiver for home priced between RM300k-RM2.5m, limited to the first RM1m of the home price while full stamp duty exemption is given on loan agreement effective for S&P agreements signed between 1-Jun-20 to 31-May-21.
- RPGT exemption for disposal of residential homes from 1-Jun-20 to 1-Dec-21 (limited to 3 units per individual)
- 70% margin of financing limit for the 3rd housing loan for property valued at >RM600k will be uplifted during HOC.
** Commodity sector support
- 100% export duty exemption from 1-Jul-20 to 31-Dec-20 for CPO, Crude palm kernel oil and refined bleached deodorized palm kernel oil.
To end this, let us know what are your thoughts on this new Economic Stimulus Plan, Will the governments PENJANA help to stimulate the economy? To get updates like and follow us on our Facebook Page
