Resurgence in Syed Mokhtar’s Pos Malaysia shares fuel speculation of postage rate hike

The last increase happened in 2010, when the government approved a doubling in rates for standard mail weighing under 20g to 60 sen. — Picture by Marcus Pheong
The last increase happened in 2010, when the government approved a doubling in rates for standard mail weighing under 20g to 60 sen. — Picture by Marcus Pheong

KUALA LUMPUR, July 3 — Pos Malaysia Bhd’s shares have recovered from their lowest point in a decade, feeding belief that the privately-owned national postal service is about to be allowed to raise postage fees.

According to The Edge Markets, analysts saw the firm owned by Tan Sri Syed Mokhtar Shah Syed Nor Albukhary’s DRB-Hicom Bhd as on the verge of receiving the government’s approval to increase the rates that were last raised in 2010.

However, the same analysts predicted that the rate increase alone would not help address Pos Malaysia’s long-term issue with declining volumes.

“It (postage tariff hike) may help to improve earnings in the first two years at most. But if we look beyond the medium term the snail mail volume has continued to contract,” one analyst told The Edge anonymously.

“The [traditional] postal business is an old economy. Nothing you do could reverse the gradual decline in snail mail, because we now have electronic mail. No one really sends letter these days as it takes too long.”

In 2010, the government approved a doubling in postage rates for standard mail weighing under 20g to 60 sen.

Pos Malaysia shares hit a 10-year low of RM1.23 in May after it reported a net loss of RM165.75 million for the 2018 financial year versus a net profit of RM93.25 million in the previous financial year.

It is currently trading around the RM1.78 mark.

In 2011, DRB-Hicom won the bid to acquire a majority stake in Pos Malaysia, effectively gaining control over the postal service that was corporatised in 1992 and listed in 2001.

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