- The Star reports that Sabah Ports, the port operating subsidiary of Suria Capital Holdings Bhd, is to invest RM229mil over the next two years.

- This is to further improve its port facilities and equipment to better serve the port users and shipping communities in Sabah.

- We understand that the board of Suria Capital had approved three new projects:

- Berth extension at Sandakan Port

- Jetty extension at Sapangar Bay oil Terminal; and

- Purchase of container and cargo-handling equipment

- The rational for the expansion programme is to provide better berthing facilities at Sandakan Port and Sapangar Bay Oil Terminal. This is in view of an increase in port traffic at both ports and to alleviate congestion.

- Furthermore, Sabah Ports would increase its container-handling equipment fleet at Sapangar Bay Container Port (SBCP), Sandakan Port and Tawau Port.

- These include one additional unit of ship-to-shore gantry crane at SB CP to the existing two units available at the port. Other planned purchases include a new mobile harbour crane for Sandakan Port in addition to further upgrades in existing equipment.

- Apart from these, Sabah Port is also undertaking studies to look into the future requirements of other ports, with the objective of improving overall port services within the state.

- With the 13th General Election behind use, we foresee a potential uptick in infrastructure

opportunities within Sabah – as project timelines are restored.

- In particular, the expansion programme by Sabah Ports could be an indicator of increasing economic activities within the state. Furthermore, tourism activities remain robust along with a marked increase in waterfront development within Kota Kinabalu (KK). As it is, some of the local property bellweathers such as S P Setia, Mah Sing and WCT Land already have strategic presence in the area.

- Our channel checks indicate that property yields within the vicinity can fetch a decent 4%-5%. This suggests more infrastructure opportunities within an expanding waterfront area – including reclamation activities.

- The likely resurgence in infrastructure opportunities further underpins our overweight stance on the construction sector.

Source: AmeSecurities