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PETALING JAYA: The newly launched National Transport Policy 2019-2030 (NTP) is expected to be a boon for the aviation sector, according to analysts.
MIDF Research highlighted that the Malaysia Airport Holdings Bhd’s (MAHB) efforts such as the Joint International Tourism Development Programme with Tourism Malaysia will facilitate airlines in promoting Malaysia overseas.
In addition, the policy paper also brought attention to the trend towards the development of secondary airports to cater to the booming low-cost travelling, as well as plans to restructure the regulatory bodies in the aviation sector.
“This in turn would bode well for MAHB’s strategy to attract more airlines and increase connectivity which will moderate effects of the international departure levy and possibly higher passenger service charge,” the research house said in a report.
Furthermore, the move by low cost carriers such as AirAsia to strengthen its presence in core markets while establishing new hubs in destinations such as Lombok is expected to continue to attract higher passengers in 2019 and will benefit MAHB, according to MIDF.
With the NTP, the Ministry of Transport will review and update rules, act and regulations as it seeks to improve logistics connectivity to cater to the e-commerce boom, continuous ports upgrade and expansion plans, and enhance productivity and increase competitiveness for transportation sector with the aim of creating a robust and adaptable regulatory framework that supports the future needs of transportation.
To do so, the ministry is looking beyond the regulated asset base (RAB) framework to drive investment in the public transportation sector.
“Overall, we believe that the RAB framework will ensure a fair cost to airport users while maintaining a fair level of returns to MAHB as it increases clarity between revenue and capital investment,” said MIDF.
It believes that MAHB passenger numbers for Malaysian operations can surpass the 100 million mark in 2019, while maintaining a relatively conservative growth rate of 3.5% at approximately 102.5 million passengers.
With regard to the transportation sector, MIDF Research applauds the plans in the latest NTP as it signals a paradigm shift in the making.
“We remain optimistic on Malaysian ports given their strategic location along major trade lanes and the economic prospects of the Asean region driven by the emergence of regional distribution hubs,” it said.
However, the research house cautioned that the anticipated higher demand of e-commerce activities will attract more new entrants for the logistics industry, prompting price competition and compressing margins.
“All factors considered, we maintain our neutral stance on the transportation sector.”
On the other hand, AmInvestment Bank Research (AmResearch) expressed a more subdued outlook on aviation sector.
It stated that prospects of airlines and airport operators are favourable backed by tourist arrival growth projected at 12% to 30 million in 2020 by Tourism Malaysia on the back the Visit Malaysia Year 2020.
“However, this is offset by cost pressure at AirAsia following the sale and leaseback of its aircraft,” said the research house.
It also expressed a neutral outlook on the transportation sector.
“While we believe the initiatives in the NTP are positive to the transportation sector, they will take time to materialise.”
AmResearch said the seaport operators are beneficiaries of the US-China trade war and trade diversion, as reflected in the increased throughput recently.
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KUALA LUMPUR: Independent retail research firm Retail Group Malaysia (RGM) has revised downward its retail sale growth forecast for 2019 to 4.4%, from 4.9% estimated in June 2019, after retail sales for the second quarter came below market expectation.
This is the second revision in the annual retail sale growth rate.
“Malaysia’s retail industry performance continues to be affected by both internal and external market environment. Within the country, slow economic momentum and limited policies to stimulate consumers’ spending hamper the growth of retail stores. Trade disputes among major economies led to slower export growth, declining stock market performance and weakening local currency. All these resulted in low consumers’ confidence level, uncertain future job prospects and unwillingness to spend more,” RGM said in a report today.
The Malaysian retail industry saw a 4.5% jump in retail sales in the second quarter of 2019 as compared to the same period in 2018.
“This latest quarterly result did not meet market expectation. Members of Malaysia Retailers Association projected the second quarter growth rate in June 2019 at 5.5%. This latest result was 18% below market expectation,“ RGM added.
A year ago, retail sale growth rate was only 2.1%. During the month of June 2018, the Goods & Services Tax (GST) was reduced from 6.0% to 0%. Hari Raya was also celebrated during the same month a year ago. However, Malaysian consumers did not go all out to spend on all kinds of retail goods mainly because they did not have extra income to do so.
Hari Raya, the largest festival in Malaysia, was celebrated earlier this year as compared to 2018. As a result, spending by Malaysians on this festival started earlier. This had boosted retail spending to a certain extent.
RGM said uncertain economic prospects due mainly to external factors had discouraged Malaysian consumers to buy more.
For the first six months of this year, retail sale grew 4.2% as compared to the same period a year ago.
However, members of the retailers’ association maintain their positive outlook on their businesses in the next three months, estimating an average growth of 3.2% during the third quarter of 2019.
For the last quarter of this year, the estimated retail growth rate is maintained at 5.8%. Year-end school holiday, Christmas and aggressive promotions by retailers are expected to move sale of consumer goods during this period.
Potential interest rate cut before end of this year may also boost retail spending, said RGM.