Digital Free Trade Zone launch still pushing up some stocks

  • Economy
  • Friday, 24 Mar 2017

Figures indicate the rise in market capitalisation following Wednesday

PETALING JAYA: A handful of logistics and e-commerce-related stocks continued to rise following the Wednesday launch of the Digital Free Trade Zone (DFTZ).

An estimated RM781.5mil in market capitalisation has been created among five main stocks, which have risen on speculation of their involvement in Alibaba’s foray into Malaysia.

Leading the pack is Malaysia Airports Holdings Bhd (MAHB), whose share price has risen some 3.75% since last Friday after it was revealed that the airport operator would be teaming up with Cainiao Network, the logistics arm of e-commerce giant Alibaba Group.

Both companies will develop a regional e-commerce and logistics hub in the KL International Airport (KLIA) Aeropolis, as part of the DFTZ initiative.

The next largest market-cap gainer was business process outsourcing solutions provider Efficient E-Solutions Bhd, which saw its share price rising by 96.08% from 25.5 sen last Friday to end yesterday at 50 sen.

It is worth noting that Singapore Post Ltd is the largest shareholder in Efficient E-Solutions with a 20.8% stake.

In turn, Alibaba Investment Ltd has a 14.41% stake in Singapore Post, making it the second-largest shareholder.

But Efficient E-Solutions remains a loss-making company, posting an RM10mil loss for its financial year ended Dec 31, 2016 (FY16).

While MAHB and Pos Malaysia Bhd have a more direct role to play in the development of the DFTZ, it remains unclear why companies such as Efficient E-Solutions, Cuscapi Bhd and Rev Asia Bhd are riding on the DFTZ wave by virtue of tenuous links.

For Rev Asia, the link is through its parent company Catcha Group, which said it had been selected as the master developer for the Kuala Lumpur Internet City, a component of the DFTZ, which aims to house 1,000 Internet-related firms.

However, there is no indication that Rev Asia, which is a digital media group, will have anything to do with the master development role of Catcha Group.

Meanwhile, software solutions provider Cuscapi, which is primarily involved in business management solutions software for the food and beverage industry, also saw its share price rising 26% to 31.5 sen.

The company, however, posted a widening loss of RM36mil for FY16, from a loss of RM25mil the year before.

Though Cuscapi has no substantial shareholders who are involved in the DFTZ development, a 2014 press release shows that Cuscapi has an RM21mil contract with MAHB for a five-year period for the provision and maintenance of point-of-sale systems in the KLIA and KLIA2 terminals.

In the case of national postal company Pos Malaysia, its share price rose 2.41% to see it enjoy an increase in its market cap by some RM86mil over this recent period.

Pos Malaysia, along with Alibaba, Cainiao and Lazada, will roll out the initial phase of the KLIA Aeropolis development before the end of the year.

The e-fulfillment hub located at the KLIA Aeropolis will comprise of key clusters of air cargo and logistics, aerospace and aviation.

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