Impact POSITIVE

Measures

• Expansion of Sapangar Bay Container Port (SBCP) in Sabah with provision of RM250m.

• Samalaju Phase 3 water supply infrastructure project in Sarawak with provision of RM100m.

• Government planning to develop cities at borders with Thailand dan Kalimantan, Indonesia including Bukit Kayu Hitam Kedah, Kalabakan Sabah, Tebedu and Bakelalan, Sarawak with provision of RM150m.

• Maritim and Logistics fund financing up to RM1b expanded to supporting oil and gas sector including shipping building and maintenance sector.

Comments

• Seaports in Sabah and Sarawak are poised to benefit from the massive development of Nusantara in the neighbouring East Kalimantan as they will handle the import of building materials for the construction of the new capital city of Indonesia. We understand local companies in Sabah and Sarawak have already received a deluge of enquires from their potential new clients/partners in Indonesia. We gathered that the USD32.5b Nusantara project will last 15-20 years.

• We believe the provision of RM250m for the year is part of the larger RM1b commitment by the federal government for the expansion Sapangar Bay Container Port (SBCP) with significant increase in capacity from the current 500,000 TEUs to 1.25m TEUs with expected completion in February 2025.

• Samalaju Industrial Park (SIP) to benefit from the improvement of the water supply infrastructure.

• The whole seaports & logistics sector indirectly will benefit from the expansion in fund financing for the shipping sector.

Beneficiaries

• SURIA (NOT RATED; TP: N/A) is the largest beneficiary from the specific provision of RM250m for the expansion of Sapangar Bay Container Port (SBCP).

• BIPORT (OP; TP: RM5.90) indirectly will benefit from the increase in logistics borders movement and improvement in Samalaju water supply infrastructure.

Source: Kenanga Research - 8 Oct 2022