Jack Ma visit may again boost e-commerce stocks
Shalini Kumar 
Ma’s visit could spur another round of investor interest in logistics, e-commerce and e-payment counters

WITH the arrival of Jack Ma, executive chairman of Alibaba Group Hldg Ltd on Nov 3, Bursa market watchers expect a fresh round of interest in stocks related to e-commerce, e-payment solutions and logistics.

Ma’s visit is in conjunction with the launch of the first phase of the Digital Free Trade Zone (DFTZ) by Prime Minister Datuk Seri Najib Tun Razak. It is set to become the first e-fulfilment hub at KLIA Aeropolis.

It has already attracted participation from close to 2,000 small and medium-scale enterprises.

It is also expected to draw RM700 mil in investments and 2,500 jobs.

Najib announced the hub in March when Ma visited Malaysia and was made a digital economy adviser.

Effectively, some counters saw increased activity on Bursa Malaysia.

Efficient E-Solutions Bhd, Malaysia Airports Holdings Bhd, Pos Malaysia Bhd, Cuscapi Bhd, GHL Systems GD Express Carrier Bhd, Xin Hwa Holdings Bhd, Century Logistics Holdings Bhd, CIMB Group Holdings Bhd and Malayan Banking Bhd had a good run in March.

Efficient E-Solutions scored the biggest gain when its shares jumped 72.4% to its historical high of 59 sen on March 23, the day after the DFTZ announcement.

The counter saw heavy trading volume. Alibaba’s indirect exposure to Efficient E-Solutions via Singapore Post Ltd further added to the excitement over the company.

SingPost is Efficient E-Solutions’ largest shareholder of with a 20.8% interest. Alibaba, in turn, has a 14.45% stake in SingPost.

Market observers promptly dubbed the gains as due to the “Jack Ma effect” (see table). While most e-commerce and logistics related stocks rose with his first visit, their upwards momentum has been maintained since March – driven by other positive news.

The consensus among analysts is that Ma’s visit might give a short-term boost to a few counters due to retail activity.

However, they caution that long-term investment in these companies may depend heavily on the DFTZ’s success.

But one fund manager believes Ma’s visit will not cause much excitement unless there are more agreements signed or details revealed about how the DFTZ hub will be implemented.

“I’m not saying it [DFTZ] is not a good thing or cannot be carried out here. But it will definitely take time to implement and get things off the ground,” he says.

Another fund manager agrees. “To have this kind of e-commerce hub where mobile payment systems or logistics will be implemented, you need to have fast and reliable broadband.

“Unfortunately, that basic building block is not quite up to mark. And how secure will our gateways be? Nonetheless, the hub is positive for us, and I want to see it work out,” he says.

Last week, Najib announced an RM83.5 mil allocation under Budget 2018 to finance phase one of DFTZ’s infrastructure.

The hub is planned to capitalise on the internet economy and cross-border e-commerce activities. It will facilitate seamless trade and enable businesses to export their goods.

Since the announcement, companies have formed alliances to leverage on the DFTZ.

In May, Pos Malaysia inked a memorandum of collaboration with Lazada (M) Sdn Bhd to establish a RM60 mil e-Commerce Regional Distribution Centre at the former low-cost carrier terminal in Sepang.

In June, both CIMB and Maybank announced teaming up with Alipay to launch e-wallet services in the country.

Alipay is a mobile payment service, operated by Ant Financial Services Group, which is affiliated with the Alibaba Group.

Maybank also rolled out its first batch of Alipay-enabled merchant terminals in Malaysia. CIMB, via its subsidiary Touch ‘n Go Sdn Bhd, recently formed an equity joint venture with Ant Financial Services.

This article first appeared in Focus Malaysia Issue 257.