Friday 29 Mar 2024
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KUALA LUMPUR (Oct 27): Analysts maintained their neutral call on plantation sector despite a 100% increase in replanting allocation for Federal Development Authority (Felda) settlers to RM60 million from RM30 million the previous year.

The allocation, announced under Budget 2018, is viewed as neutral for the sector as it only affects a small sector of the industry.

CIMB Investment Bank Bhd agribusiness research regional head Ivy Ng said the replanting incentive is not surprising because it was allocated last year.

However, Ng told theedgemarkets.com that this could be slightly positive to the industry because it can accelerate the replanting exercise as the allocation is higher.

“According to Budget 2018, about RM43 million would be set aside to reimburse settlers the cess paid for replanting oil palm from rubber would not be affected by the incentives. So I would say it is a neutral rating on the sector,” she said.

 

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