Port stocks boom thanks to thriving businesses in Vietnam

Port stocks are expected to rise in the second half and next year

According to investment report highlighting Vietnam's perspective, Asia Frontier Capital (AFC) emphasied after the boom of shipping stocks at a time when shipping fees skyrocketed, port stocks also jumped aggressively.

The fund believes port stocks would be a main beneficiary of the Vietnamese export boom in a controlled competitive environment.

Port businesses in Vietnam will also continue to benefit in the second half of 2021 with a strong increase in demand in many developed markets such as the US, Europe, and the UK. Meanwhile, the virus outbreak in Asian countries continued to have a negative impact on sea freight cargo handling efficiency, which created a supply and demand imbalance and therefore led to dramatic increases in shipping fees.

In Vietnam, shipping fees also increased sharply but port fees remained almost unchanged in the first half of 2021. Since July 2021, most of the ports in Vietnam started to increase their fees due to strong demand and limited capacity. The COVID-19 outbreak in Vietnam has lengthened loading and unloading times from an average of five to eight days at most ports. This forced many ships to line up for a long time to load and unload their cargo.

Since shipping companies already benefitted from increasing shipping fees, they are willing to pay higher fees to the ports to get priority handling of their containers and many ports had already increased their fees with shipping companies for H2/2021 and 2022. AFC, therefore, expects their profits to increase strongly during this period.

According to the Vietnam Maritime Administration (VMA), container throughput via Vietnamese seaports hit double-digit growth in the year to date despite COVID-19.

Some seaports witnessing the highest container throughput in the first seven months of 2021 were Quang Nam, My Tho, Haiphong, and Ho Chi Minh City. Meanwhile, seaports at Quang Ninh, Danang, and Can Tho saw strong falls in container throughput, according to the VMA.