KUALA LUMPUR, April 10 — Kenanga Investment Bank has maintained its neutral call on seaports and logistics amid the global economic uncertainty.

Kenanga said the World Trade Organisation projected global merchandise trade volumes to grow by one per cent this year compared with an expansion of 3.5 per cent chalked up last year.

"Also, consumer confidence and spending globally are likely to take a beating on sustained elevated inflation, rising interest rates and the slowing global economy,” it said in a research note today.

Kenanga said these issues do not augur well for seaport operators like Westports Holdings Bhd, but Bintulu Ports Holdings Bhd is expected to be able to weather these macro challenges.

"Bintulu Port will be able to weather these challenges better thanks to its stable operation in the handling of liquefied natural gas cargoes, a potential tariff hike at Bintulu Port as well as the long-term growth potential of Samalaju Industrial Port’s hinterland in Samalaju, Sarawak driven by the growing investment in heavy industries,” it added.

Additionally, stricter regulations on carbon emissions may post new challenges to global trade, particularly, one from the United Nations’ International Maritime Organisation and another from the European Union.

As for logistics, the sector is expected to ride on the e-commerce boom, and the sector is more domestically driven and less directly exposed to external headwinds.

"Industry experts project the local e-commerce gross merchandise volume to grow at a compound annual growth rate of 11 per cent from 2022 to 2027.

"The booming e-commerce will spur demand for distribution hubs and warehouses to enable just-in-time delivery, reshoring/nearshoring to bring manufacturers closer to end-customers, efficient automation system including interconnectivity with the customer system, and warehouse decentralisation to reduce transportation costs and de-risk the supply chain,” it added.

The investment bank said there is also strong demand for cold-storage warehouses on the back of the proliferation of online grocery start-ups. — Bernama