KUALA LUMPUR (Jan 16): Shipping and logistics stocks were the most actively traded on Tuesday morning due to the potential for increased freight rates amidst the Red Sea crisis, which has disrupted global logistics following Houthi rebel attacks on shipping liners.

Among the counters, Tanco Holdings Bhd shares closed up three sen or 4.8% to 65.5 sen, bringing the company a market capitalisation of RM1.32 billion. The stock was among the top 20 actively traded stocks in Bursa Malaysia, with 56.26 million shares changing hands, double its 200-day average volume of 27.88 million shares.

In a separate development, Tanco has received government approval to develop a smart AI container port in Negeri Sembilan.

Sealink International Bhd, meanwhile, saw its trading volume spike to 49.81 million shares on Tuesday, more than 11 times compared to 4.48 million shares traded on Monday. The stock had earlier hit an intraday high of 24 sen, before settling unchanged at 21.5 sen for a market capitalisation of RM108 million.

PDZ Holdings Bhd saw 39.11 million shares change hands, three times higher compared to 13.05 million shares traded on Monday. It declined 13.33% or one sen to 6.5 sen, valuing the company at RM38 million.

Fast Energy Holdings Bhd shares settled down two sen or 14.81% to 11.5 sen, valuing it at RM25 million. Some 24.36 million shares were traded.

Meanwhile, TA Securities said the transportation sector grapples with heightened risks following a Houthi armed group’s assault on MV Galaxy Leader in November 2023, leading to its hijacking.

In a note on Tuesday morning, the house said despite initial perceptions of this as an isolated incident, subsequent drone attacks on MSC Clara and Swan Atlantic in December intensified disruptions to maritime trade.

It noted that the global container freight index surged to US$3,072 (RM14,268) by Jan 11, triggered by shipping companies rerouting vessels away from the Red Sea due to security concerns.

“The surge in shipping costs, driven by increased operational expenses, has significantly boosted the stock prices of major shipping firms such as Maersk, Hapag-Lloyd, Cosco, and Evergreen, with share values peaking in early January and closing with an average gain of 28% last Friday, attributed to the tension in the Red Sea,” it said.

TA Securities said although freight forwarders anticipate delays and equipment shortages from vessel rerouting, Westports currently reports no delays but expects a minor impact.

Additionally, it said while it expects the warehouse operators to foresee minimal impact on land transportation, customers may implement moderate price hikes to offset rising shipping costs.

Global shipping disruptions offer benefits to freight forwarders and warehouses, with local maritime players potentially gaining from rising rates, especially during the Israel-Hamas war.

Positive impacts are evident in recent share prices, emphasising the vital role of third-party logistics (3PL) in enhancing supply-chain resilience amid geopolitical tensions.

The long-term outlook 3PL management is optimistic for global risk management, justifying a peak sector price-to-earnings ratio multiple of 16 times. CJ Century Logistics Holdings Bhd, the only 3PL company under coverage, is valued at 50 sen per share with a price-to-earnings ratio multiple of 14 times.

For Westports, the sole port operator under coverage, the valuation uses a dividend discount model (DDM), with the revised valuation at RM4.20 per share after adjusting the risk-free rate assumption to 4.0%.

At the closing bell, CJ Century shares rose 6.41% or 2.5 sen to 41.5 sen, while Westports gained two sen or 0.54% to RM3.75, valuing the company at RM12.79 billion.