KUALA LUMPUR: Passenger traffic growth for Malaysia Airports Holdings is expected to increase in the final months of the year.
Analysts based their prediction on August data which showed a modest uptick in travellers.
The optimism is also based on the fact that usually the year-end festivals and shutdowns encourage people to travel.
Passenger traffic totalled 10.49 million in August, about 2.0 per cent higher than the 10.29 million handled during the same month last year, Malaysia Airports said in a statement.
The Nikkei Asian Review (NAR) quoted Kenanga Investment Bank analyst Adrian Ng as saying: “We are banking on a stronger [fourth-quarter] performance given that it is a seasonally strong quarter.
A recovery in passenger traffic at Istanbul airport, which it owns, was also on the cards as “negative news flow on Turkey begins to fade,” Ng added.
Overall, the company handled 4.69 million international passengers, a 1.9 per cent year-on-year increase, while domestic traffic grew 2.1 per cent to 5.80 million passengers from a year earlier led by a surge in travellers to Kuala Lumpur International Airport.
“The domestic sector caught our attention” after reversing a 1.2 per cent year-on-year decline in the first half of 2016 to grow 0.6 per cent year-to-date, the NAR report quoted MIDF Amanah Investment Bank analyst Tay Yow Ken as saying.
That indicates “sluggishness in demand for domestic travel is dissipating,” he said.
Tay is reviewing his initial recommendation for the stock following the better-than-expected performance in passenger traffic at Malaysian airports. MIDF currently rates Malaysia Airports at Neutral with a target price of RM6, said the report
Malaysia Airports is the world’s second largest airport company by travellers handled. It manages more than three dozen airports in Malaysia and owns Istanbul’s Sabiha Gokcen International Airport.
Shares of Malaysia Airports rose 1.24 per cent to RM6.53 while the benchmark FTSE Bursa Malaysia KLCI ended 0.5 per cent lower.