Malaysian ports’ prospects to remain healthy

Activity fell in Malaysia and Taiwan, a sign the U.S.-China trade conflict's impact on the rest of Asia was broadening.

KUALA LUMPUR: RAM Rating Services Bhd (RAM Ratings) expects the container- and cargo-handling prospects of Malaysian ports to remain healthy this year, in line with the gradual global economic recovery.

In a statement, RAM Ratings said the throughput growth was expected to remain in the low single-digit levels, akin to the modest 3% recorded in 2016.

Its co-head of infrastructure and utilities, Davinder Kaur Gill, said the prospects for the key national ports - including Westports Holdings Bhd, Northport (M) Bhd and Pelabuhan Tanjung Pelepas Sdn Bhd - remained stable, benefiting from the strengthening local and regional economic outlook.

“Nonetheless, they are still vulnerable to the effects of the current trend towards protectionism and changes in shipping alliances,” she said.

Davinder said Malaysia's throughput was resilient in 2016, with container throughput recording a 10-year compound annual growth rate of 6%, while cargo throughput came in at 5%. At the same time, she said, Malaysia handled over 25% of the containers passing through the Asean-5 nations ( Malaysia, Singapore, Thailand, Indonesia and the Philippines) and accounted for 3% of the global container traffic.

“While prospects for regional trade expansion are still encouraging, the long-term growth of South-East Asian ports must be analysed in the context of economic growth, the region's upcoming new port capacity and the requirements of the newly formed shipping alliances,” said Davinder.

From a funding perspective, she said, the Malaysian and regional port sectors’ financing needs would be massive if all the announced expansion plans come to fruition soon. — Bernama