20
business news
Strong case for port
tariff to be liberalised,
says Mima
KUALA LUMPUR: There is a
strong case for port tariff in
Malaysia to be liberalised to
enhance the competitiveness
of local ports to attract more
users, says a study conducted
by Maritime Institute Malaysia
(Mima).
“Although Malaysia can be
proud of having seaports that of-
fer facilities and services compa-
rable to some of the world’s best
ports, they have somewhat been
perceived by some quarters as
low cost terminals due to their
relatively low charges,” said its
fellow senior, Nazery Khalid, who
led the study.
Tariff of federal ports is fixed by
the government and, in the case
of several ports, has remained
unchanged for many years.
“While low port tariff is
desirable to shipping lines and
shippers who place significant
importance to the pricing of port
services in their decision to use
a particular port, port operators
have voiced their concern about
the adverse long-term effects of
low tariff charges on their com-
petitiveness,” said Nazery.
According to him, the study
found that port operators argued
that a fixed tariff regime ham-
pered their ability to compete
on a level playing field with other
regional ports.
“Of further concern to local
port operators is the rising opera-
tion cost and capital expenditure
theSun | MONDAY DECEMBER 22 2008
KL share prices likely to be
to increase their capacity and
improve their efficiency.
“They argue that low tariff
rates do not justify the huge
investment spent and discour-
ages them from providing better
services to their customers,”
higher this week KL market summary
INDICES
FBMEMAS
DESEMBER 19, 2008
5725.75
CHANGE
-21.80
Nazery said. SHARE prices on Bursa COMPOSITE 876.40 -4.10
There are pros and cons Malaysia are likely to trade INDUSTRIAL 2091.94 -7.22
to adopting a liberalised tariff CONSUMER PROD 280.25 -0.97
higher this week led by plan-
regime, Nazery explained. INDUSTRIAL PROD 67.58 +0.29
tation and financial stocks CONSTRUCTION 164.50 -2.04
“On the plus side, a market- on expectations of better TRAD/SERV 117.62 -0.71
driven tariff structure can lead to earnings, dealers said. FINANCE 6777.19 +10.70
various positive effects, including Dealers said besides plan- PROPERTIES 518.23 +0.68
the establishment of a simple and tation and financial stocks, PLANTATION 4143.93 -28.71
transparent tariff structure which the local market had plenty MINING 235.07 UNCH
can be very helpful for port users of quality, underpriced stocks, FBMSHA 5953.17 -52.23
and an efficient pricing based on FBM2BRD 3986.88 -28.70
which were up for grabs.
business relationship between TECHNOLOGY 13.26 -0.09
They said investors should
port operators and users,” he start to realise that the liquid- TURNOVER VALUE
added. ity from the financial stimulus
On the minus side, Nazery 386.975mil RM586.02mil
package and lower fuel prices
said port users fear that a liber- would eventually surface and
alised tariff may lead to unilat- help to stabilise economic
eral increase of charges by port expected to trade between the 880- and
activities.
operators and dramatic rise of
The government had on Dec 15, 2008 900-point level next week.
charges that will be burdensome
reduced the retail fuel cost for the sev- Interest is likely to be seen on finan-
to port customers.
enth time since the surprise upsurge in cials stocks as well on expectations of
This may erode the goodwill
June 5, 2008. no further cut in interest rates to curb
between port operators and port
users that may lead to ports be- As of plantation stocks, these shares inflation and hence steadier earnings.
ing shunned by their customers, are expected to attract investors as the Elsewhere, investors would closely
he said, adding the rise in the weaker US dollar has spurred sales of watch the development of Sime Darby
cost of trade and transport may crude palm oil, thus boosting earnings, Bhd’s deal to acquire a 51% equity in
erode the nation’s trade and said the dealers. Institut Jantung Negara (IJN).
maritime competitiveness. However, the dealers said trading is The proposal of the conglomerate has
Nazery said it was high time expected be cautious as the market is still been postponed until an indepth review is
that port stakeholders adopted affected by the gloomy global financial undertaken by the relevant ministries, the
a more dynamic and progressive outlook, thus limiting huge fresh posi- government announced on late Friday.
stand on the issue of port tariff. tions. Sime Darby shares closed the week at
– Bernama At home, the benchmark KLCI is RM5.45. – Bernama