KUALA LUMPUR (Nov 2): Courier service companies emerged as the most actively traded stocks this morning today as investors turned positive on the Malaysian Communications and Multimedia Commission (MCMC)’s move to freeze all new courier service licences for two years.
GD Express Carrier Bhd rose as much as five sen or 13.33% to 42.5 sen in the morning trade. At 10.32am, it had pared some gains at 41 sen, still up 3.5 sen or 9.33%. The counter saw 92.86 million shares change hands, making it at the second top actively traded stock so far today.
Nationwide Express Holdings Bhd surged 22.5 sen or 37.82% to a high of 82 sen. It had pared some gains at 78.5 sen at 10.34am, still up 19 sen or 31.93%, making it the third top gainer today. The stock saw 40.95 million shares traded.
Meanwhile, Pos Malaysia Bhd added as much as seven sen or 7.45% to RM1.01 before settling down at 96.5 sen at 10.36am. The counter saw 28.48 million shares traded.
The theme play of courier service companies was probably due to the news of the government freeze on issuing new licences for two years. The move might be positive for existing players as cut-throat competition would not intensify.
However, due to a vast number of service providers, analysts opined that courier service profit margins would remain thin despite greater demand for delivery services.
In a recent note, AmInvestment Bank Research said it believed the latest development is mildly positive for all existing courier service players as it puts a stop to the entry of new players.
“However, aspiring players could still gain entry via the acquisition of existing players. Meanwhile, in the absence of a major consolidation, the playing field remains crowded with 109 courier service licensees in Malaysia,” it said.
It also believed the new norms (accelerated digitalisation, social distancing, proliferation of online shopping, etc) in the aftermath of the Covid-19 pandemic are positive for the parcel delivery segment.
“However, this would be offset by an overly crowded playing field with cut-throat competition resulting in razor-thin margins as mentioned,” it said.