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Malaysia Freight Transport Report Q3 2007Product Type: Market Research ReportPublished by: Business Monitor International Published: November 2007 Product Code: R302-1476 Description Shipping has been given a boost since the August 2006 decision by Lloyd’s London insurance market tolift the war-risk insurance rating on shipping in the Malacca Strait. More recently MISC, Malaysia’s tanker fleet that specialises in oil and liquefied natural gas (LNG), has acknowledged that freight rates for crude oil, along with container rates, will remain soft over the next two years, increasing competitive pressures but not holding back the company’s fleet expansion plans. MISC reported a 5.3% rise in fourthquarter profit on May 10, boosted by gains on the sale of ships. Malaysia’s sixth-biggest listed firm, valued at US$10.6bn, posted a net profit of MYR702.59mn (US$206.6mn) for the three months ended March 31, including an exceptional pre-tax gain of MYR94.5mn. Excluding the exceptional gains, profits were lower than the MYR667.13mn a year earlier due to softer shipping rates and a higher cost of operations, MISC said. ‘The prospect for the shipping industry is softening due to the additional capacity from newbuildings and the delay in scrapping of old tonnage,’ it said. BMI still sees the net effect on our Malaysian shipping forecast as being positive. Our newly released Malaysia Freight Transport Report concludes that in terms of freight carried, shipping traffic will grow by an average 7.3% per year in 2007-2011. The total number of containers handled at Malaysia’s ports will grow more strongly at 11.1% per year. This forecast takes into account our view that the global shipping boom has cooled. Despite the mixed outlook for freight rates, the continuing export drive and the dynamism of China and other regional trading partners will underpin strong demand. We now expect total freight carried, measured in million tonnes-km (mntkm), to grow by an annual average of 7.1% over the 2007-2011 period. Total road freight turnover is expected to grow at an average annual rate of 6.6% in 2007-2011. The cross-Malaysia railway link project is being revived, but will not become operational until after 2011. We expect rail freight traffic to perform reasonably well, with annual growth averaging 6.5%. Malaysia scores reasonably well on our overall freight industry business environment ranking. The total score of 43.0 out of a theoretical maximum of 70.0 places it close to the average for the regional peer group (44.8). It is at the top end of the spectrum in terms of expected freight transport growth and scores well as far as long-term economic risk, transport infrastructure growth and the regulatory and competitive environments are concerned. The outlook for the freight industry is encouraging. For the 2007-2011 forecast period, we expect the transport and communications sector to continue outpacing the economy as a whole in value terms. It will achieve average annual growth of 5.7%, versus 5.4% for overall GDP. The total value of transport and communications GDP will rise to US$18.1bn in nominal terms by 2011, representing 7.4% of Malaysia’s GDP. Table of Contents
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