The severe floods in Thailand, that have inflicted untold damages, may inadvertently benefit some sectors and companies in Malaysia.
OSK Research said in its latest note that companies involved in tourism and healthcare in Malaysia could benefit from traffic diverted from Thailand, a trend which would continue even after the flood waters receded.
“Consumer companies may get a short-term lift from increased exports to Thailand, while the technology and automotive sectors may eventually draw more investments from foreigners which are leery of natural disasters,” said the research unit. The worst flood in 50 years in Thailand had so far struck 62 of the country’s 76 provinces in the north, northeast and central region.
“As the situation prolongs in Bangkok, tourists and medical tourists may cancel travel plans and instead seek alternative destinations, such as Malaysia, which has many comparable offerings in terms of tourist attractions and medical facilities,” it said.
Some tourists are expected to divert to other South-East Asian destinations, although the impact will be minimal.
OSK Research said Malaysian consumer companies would also get a short-term lift, as they would be asked to take up the slack in food and beverage production, as Thai factories would take some time to resume production.
“The production disruption at factories in Thailand may result in local factories ramping up production of food products that can be exported to make up for the shortfall in Thailand,” it said.
On technology and automotive sectors, given the extensive damage to the Thai facilities, with total reconstruction efforts estimated at RM10.1bil to RM17.2bil, investors may even consider alternative locations for future investments.
As such, companies offering services to set up technology-based manufacturing plants may reap the benefits over the longer term.
from thestar.com.my
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