KUALA LUMPUR (April 6); Kenanga IB Research has reiterated its “Neutral” rating the shipping and ports sector and said that the stronger US Dollar would not translate into higher volume for port operators as the location and efficiency of port were still the prioritised criteria ahead of the pricing.

In a note today, the research house said it does see the lower port tariff on the back of weaker local currency to benefit local port operators significantly.

“Meanwhile, the subdued form of liquified natural gas (LNG) charter rate has continued into 2015 on the back of growing vessel supply but the charter rate in petroleum segment strengthened further due to the stocking up activities thanks to low crude oil prices.

“All in, we maintain our neutral stance on the sector considering no catalyst is in our sight,” it said.

Kenanga IB Research said it does not see see near-term catalysts in the sector with the stronger performance in petroleum charter rate being offset by the weakness in LNG segment while the valuation of the ports had also peaked with timeline of the port tariff hike still remain unknown.

“Our top pick of the sector is Bintulu Port Holdings Bhd (OP; TP:RM8.08) as we like the company for its long term prospects on the back of increased economic activities in Sarawak thanks to Sarawak Corridor of Renewable Energy(SCORE) initiative,” it said.