Malaysia's Trade To Grow On Global Economic Resilience, Technology Rebound Cycle

KUALA LUMPUR, March 11 (Bernama) -- RHB Investment Bank (RHB IB) has reiterated its sanguine view of Malaysia's trade outlook for 2024, buoyed by the resilience of global and regional economies, the global technology cycle rebound, and China’s positive economic dynamics.

In a research note, it said Malaysia’s exports and imports rebounded 8.7 per cent and 18.8 per cent year-on-year (y-o-y), respectively, in January, which are expected to benefit container terminal Westports and logistics players like TASCO and FM Global.

Consequently, RHB IB maintained its ‘overweight’ recommendation on the transportation sector.

“Westports’ FY2023 results exceeded ours (105 per cent) and consensus' (104 per cent) expectations marginally. The monthly container volumes handled by Westports in Dec 2023 were the highest ever – signalling a recovery in regional trade activities.

“The container throughput exceeded initial guidance of low single-digit growth, due to empty boxes repositioning in the first half of 2023 (1H2023) and stronger gateway twenty-foot equivalent units (TEUs) in 2H2023, especially in December,” it said.

RHB IB noted that Westport's fourth quarter of 2023 (4Q 2023) container revenue was relatively stable with a 5.0 per cent growth y-o-y despite an 11 per cent increase in container volume, due to low value-added services contribution and storage charges.

Meanwhile, it said Malaysia Airports Holdings Bhd’s (MAHB) aeronautical and nonaeronautical segments are on the road to recovery.  

It said the company’s FY2023 performance met its expectations, given the concurrent growths in passenger traffic and recovery rates.  

“January 2024’s traffic data also points to another new high (102 per cent of 2019 levels) which is in line with our view of full recovery expectations in 2024, while regulatory clarity remains uncertain as the 2019 operating agreements approach expiration, pending government consideration of aeronautical charges appeals.

"We anticipate the resolution of aeronautical charges would inject new growth catalysts for MAHB's earnings visibility going forward," it said.

-- BERNAMA