Retail, hospitality to benefit from Singapore-Malaysian open border

Some 10m tourists to the country were from the island republic in the pre-pandemic period who spent some RM21b in 2019 


WHILE aviation-based counters are expected to benefit from the border reopening and Malaysia’s transition to the endemic phase, counters related to tourism, retail and consumer sectors are also among the key beneficiaries from the reopening of the Malaysia-Singapore border as of April 1. 

Some 10 million tourists to the country were from the island republic in the pre-pandemic period who spent some RM21 billion in total based on 2019 figures.

Malacca Securities Sdn Bhd research head Loui Low said counters that stand to benefit from Malaysia and Singapore border reopening include Genting Malaysia Bhd and YTL Hospitality Real Estate Investment Trust (YTL Reit).

He expects more tourist arrivals to their hospitality assets as well as improve investors’ sentiment on the broader market.

“I think the overall view should be turning more positive amid the reopening of the border as more tourists come in. 

“That will also boost the economic activities and therefore, it would translate to potential higher earnings for some corporates,” he told The Malaysian Reserve (TMR) when contacted yesterday. 

According to Low, apart from the hotel and hospitality counters, some retailand consumer-based stocks such as Berjaya Food Bhd, Bonia Corp Bhd and Padini Holdings Bhd should also see some positive impact from the tourist spending. 

An analyst with another local brokerage also expects companies like Genting Malaysia, YTL Reit, Shangri-La Hotels (M) Bhd and smaller names like KSL Holdings Bhd to be among the counters that will benefit from the open borders. 

He expects the opening to help keep overall market sentiment strong and attract further foreign buying of local equities. 

“We believe the removal of strict quarantine and testing requirements are key to reviving leisure and business travel. 

“However, travellers may still be cautious about the Covid-19 virus, as well as new variants around,” the analyst told TMR. 

Heavyweights Genting Malaysia and YTL Reit rose by 1.73% and 7.83% respectively, over the past one week, in line with the border reopening announcement made on March 24. 

Shangri-La Hotels saw a further increase in its share price by 0.6% over the past week. 

Malaysia and Singapore agreed to reopen their land borders for fully vaccinated travellers beginning April 1 without the need for travellers to take Covid-19 pre-departure and arrival tests or be quarantined. 

This was stated in a joint statement by Prime Minister (PM) Datuk Seri Ismail Sabri Yaakob and Singapore’s Prime Minister Lee Hsien Loong on March 24. 

Ismail Sabri said Malaysia will open its borders to foreign travellers beginning April 1. 

He added the move reflects good relations, cooperation in various aspects and strong ties between the people of the two countries. 

“This will definitely contribute to recovery efforts with a positive impact on the economy and wellbeing of the people of both countries,” the Malaysian PM had said. 

Meanwhile, Lee said the decision is a significant milestone in both countries toward living with Covid-19. “It reflects the strong collaboration both sides have enjoyed throughout the pandemic and will help both countries emerge stronger from this crisis,” he noted.