Kenanga IB: Trade Shifts, AI To Drive Logistics Sector In 2025

KUALA LUMPUR, March 12 (Bernama) -- Kenanga Investment Bank Bhd (Kenanga IB) expects the domestic logistics sector to sustain steady growth in 2025, driven by the expanding e-commerce industry, the global technology upcycle fuelled by artificial intelligence (AI) demand, and a resilient United States (US) economy.

In a note today, the investment bank said the sector is also set to benefit from potential trade diversion amid US-China tensions and a short-term surge in container volumes at domestic ports due to frontloading ahead of a possible US tariff hike on Chinese goods this year.  

Kenanga IB maintained a neutral outlook on the seaport and logistics sector and did not designate a top pick, following the recently concluded fourth-quarter calendar year 2024 earnings season, which saw mixed performances across industry players.  

It said Westports Holdings Bhd (market perform; target price: RM4.40) exceeded expectations, while Bintulu Port Holdings Bhd (market perform; target price: RM6.20) met forecasts.

However, it noted that Swift Haulage Bhd (market perform; target price: RM0.41) and Pos Malaysia Bhd (underperform; target price: RM0.15) fell short of expectations.  

Kenanga IB also flagged stricter carbon emission regulations as a potential challenge to global trade, citing measures from the United Nations’ International Maritime Organisation and the European Union (EU).  

"While the exact implications remain uncertain, container volumes to the EU will inevitably be affected, particularly shipments from China, a major exporter of iron, steel and aluminium to the bloc," it added.  

-- BERNAMA