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Thursday, 07 July 16
CONSOLIDATION TO RULE OVER SHIPPING, AS EXECUTIVES SEEK INVESTMENT OPPORTUNITIES IN CHINA, INDIA AND EUROPE SAYS NORTON ROSE SURVEY
 The transport sector is looking to Asia Pacific as the key market for investment over the next five years, according to the seventh The way ahead Transport survey from global law firm Norton Rose Fulbright. China and India are the most popular jurisdictions for investment, followed by the US, with growth through consolidation viewed as the best investment opportunity currently. While confidence among respondents from the aviation and rail industries is high, owing to lower oil prices, the availability of funding and the impact of infrastructure improvements, the shipping industry remains the least optimistic as a result of overcapacity in many subsectors of the market.
Over half (52%) of all respondents to the Norton Rose Fulbright survey agree that a global recession poses the greatest threat to their industry. However, despite political uncertainty, most agree that the transport sector can expect to enjoy further growth over the next five years. Rising passenger numbers and freight volumes are anticipated (by 73%) and an increase in the number of routes and services is expected (52%).
Investment in technology is expected to rise, according to 67%, with low carbon technology and predictive analytics expected to represent the most significant driver of change in the transport sector over the next five years.
Infrastructure remains a key theme for the sector. After consolidation, infrastructure improvements are viewed as the best investment opportunity currently (by 19%), and infrastructure investment is seen as the most helpful form of government support (by 25%). For the aviation, rail and road industries, inadequate infrastructure is seen as the greatest challenge to the operational efficiency of their industries.
Bank debt, capital markets and private equity will represent transport businesses’ main sources of funding over the next two years, and 74% of respondents expect the availability of funds to stay the same, or even increase, over the next five years.
Harry Theochari, global head of transport at Norton Rose Fulbright, comments:
“The transport sector is continuing to look to Asia Pacific for investment opportunities, encouraged by rising demand and China’s ambitious Belt and Road initiative, a modern day silk road which will improve China’s infrastructure links with the rest of the world.
“Sentiment is high in the aviation and rail industries, buoyed by the expectation of increased passenger numbers. However, shipping continues to feel the effects of overcapacity in many markets, and an increase in enforcement actions is widely predicted, although in the longer term respondents believe conditions will improve.
“Investment in infrastructure and technology, and consolidation through both M&A and joint ventures, will be key drivers for transforming the transport sector and assisting growth.
“The adoption of new technology in particular will help to address numerous issues the sector has been grappling with in recent years, such as low carbon technology to meet increasingly stringent environmental legislation, and predictive analytics to anticipate repairs and maintenance and better understand and forecast consumer behavior.
“While respondents are most fearful of the impact of a worldwide recession, they will be watching closely the implications of the UK’s referendum result. The transport sector is international and highly regulated and any UK exit from the EU would need to take into account a number of complex issues.”
Shipping
Shipping is the least optimistic industry within the transport sector, by a significant margin. Only 15% believe that current market conditions are positive, down from 33% in 2015 and 69% in 2014.
Overcapacity is the principal reason given for this lack of optimism (66%), followed, to a lesser extent, by economic uncertainty in key markets (27%).
Respondents are more optimistic when asked to consider the outlook for shipping over the next five years. Fares and freight costs will increase according to 67% and the same proportion anticipate an upturn in passenger numbers and freight volumes. The number of routes and services offered is also expected to rise, according to 35%. However, just 22% believe that funding will become more readily available and 64% think that the number of enforcement actions will increase as lenders seek to protect their positions and recover losses. Most (68%) expect fuel costs to rise.
Investment opportunities
Much of the shipping industry (58%) continues to favour Asia Pacific for investment opportunities over the next two to five years, followed, to a far lesser extent, by Europe (16%). China (17%) and India (16%) remain the most popular markets for investment.
A merger or acquisition is seen as the optimal investment opportunity (by 34%, up from 29% in 2015), while 13% favour joint ventures, alliances and pools (down from 28% in 2015).
Respondents expect consolidation to be at the centre of shipping businesses’ strategies over the next 12 months, either in the form of M&A (22%) or joint ventures (19%), while 22% expect a focus on the disposal of non-core assets. Almost three-quarters (72%) expect investment in technology to increase over the next five years, with low carbon technology expected to have the most significant impact on the industry during this period (by 33%), followed by predictive analytics (by 24%).
Regulation
Almost half (42%) believe that greater transparency in the application and enforcement of existing and proposed regulations would be the most helpful form of government support for the shipping industry, more so than fiscal incentives (32%) or investment in infrastructure (29%). Environmental regulation is seen as the regulation that has had the greatest impact on shipping over the past decade (by 49%), followed by trade and financial sanctions (by 25%).
Supply and demand imbalances are seen as the greatest challenge to the operational efficiency of the industry (by 47%), followed by a lack of qualified people (12%) and emission controls (9%). A global recession is seen as the greatest threat to the health of shipping over the next five years (by 68%). To a lesser extent, respondents are also concerned about the impact of enforcement by creditors on debt obligations (12%) and continued political and economic uncertainty in the Eurozone (8%).
Bank debt is once again expected to act as shipping’s primary source of funding over the next two years (22%), followed by shareholder support (18%) and private equity (16%).
Despite the problem of overcapacity in many sub-sectors of the industry, fuelled by new build vessels coming on to the market, 11% think that ECA funding will be the industry’s main
source of finance.
Source: Norton Rose Fulbright | Hellenic Shipping
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Monday, 11 July 16
THE MAIN SEA FREIGHT INDEX, BDI ROSE FURTHER ON 8 JULY DUE TO STRONG DEMAND FOR PANAMAX SHIPS
COALspot.com: The Baltic Exchange, tracking rates for ships carrying dry bulk commodities rose this past week. The BDI was up 3.84 percent from las ...
Monday, 11 July 16
DRY BULK MARKET: UP TO 30 MILLION DWT OF OLDER BULKERS WILL NEED TO BE SCRAPPED BY END OF 2017 FOR MARKET TO FIND BALANCE
Tonnage oversupply in the dry bulk market is more than evident, as newbuildings have been hitting the water faster than owners can scrap their olde ...
Friday, 08 July 16
U.S. WEEKLY COAL OUTPUT UP 3% TO 14.1 MMST - EIA
COALspot.com – U.S, world’s second largest coal producers has produced approximately totalled an estimated 14.1 million short tons (mms ...
Thursday, 07 July 16
PANAMAX : THE TENDENCY FROM LAST WEEK CONTINUES WITH A CONSIDERABLY STRONGER SENTIMENT ALL ACROSS THE BLOCK - FEARNLEYS
Capesize
Rates have been holding at steady levels over the last weeks but towards end of this period they are becoming under more pressure as gen ...
Wednesday, 06 July 16
KOMIPO INVITES BIDS FOR 780000 MT OF BITUMINOUS COAL
COALspot.com: South Korea state-owned utility Korea Midland Power (KOMIPO) issued a new tender for 780,000 Metric Tons of Bituminous Coal for its B ...
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- Coal and Oil Company - UAE
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- Ind-Barath Power Infra Limited - India
- McConnell Dowell - Australia
- Altura Mining Limited, Indonesia
- Riau Bara Harum - Indonesia
- Planning Commission, India
- Global Coal Blending Company Limited - Australia
- Siam City Cement - Thailand
- Straits Asia Resources Limited - Singapore
- Dalmia Cement Bharat India
- Agrawal Coal Company - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Independent Power Producers Association of India
- Barasentosa Lestari - Indonesia
- Georgia Ports Authority, United States
- Intertek Mineral Services - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Carbofer General Trading SA - India
- Xindia Steels Limited - India
- India Bulls Power Limited - India
- Global Green Power PLC Corporation, Philippines
- Port Waratah Coal Services - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Coalindo Energy - Indonesia
- Kumho Petrochemical, South Korea
- Billiton Holdings Pty Ltd - Australia
- Bharathi Cement Corporation - India
- Toyota Tsusho Corporation, Japan
- South Luzon Thermal Energy Corporation
- LBH Netherlands Bv - Netherlands
- Indonesian Coal Mining Association
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- Minerals Council of Australia
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- Bukit Baiduri Energy - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- PowerSource Philippines DevCo
- Kaltim Prima Coal - Indonesia
- Videocon Industries ltd - India
- Marubeni Corporation - India
- Madhucon Powers Ltd - India
- Parry Sugars Refinery, India
- PTC India Limited - India
- Energy Development Corp, Philippines
- White Energy Company Limited
- Coastal Gujarat Power Limited - India
- Ambuja Cements Ltd - India
- International Coal Ventures Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Sarangani Energy Corporation, Philippines
- Posco Energy - South Korea
- Jaiprakash Power Ventures ltd
- Alfred C Toepfer International GmbH - Germany
- Simpson Spence & Young - Indonesia
- Semirara Mining Corp, Philippines
- Karaikal Port Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- Sindya Power Generating Company Private Ltd
- Rashtriya Ispat Nigam Limited - India
- Directorate Of Revenue Intelligence - India
- Bhatia International Limited - India
- Larsen & Toubro Limited - India
- GAC Shipping (India) Pvt Ltd
- Bukit Makmur.PT - Indonesia
- SMG Consultants - Indonesia
- Bhushan Steel Limited - India
- Sical Logistics Limited - India
- VISA Power Limited - India
- AsiaOL BioFuels Corp., Philippines
- Gujarat Electricity Regulatory Commission - India
- MS Steel International - UAE
- Krishnapatnam Port Company Ltd. - India
- Wood Mackenzie - Singapore
- Price Waterhouse Coopers - Russia
- The Treasury - Australian Government
- Rio Tinto Coal - Australia
- Bulk Trading Sa - Switzerland
- Sree Jayajothi Cements Limited - India
- Manunggal Multi Energi - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Gujarat Sidhee Cement - India
- Power Finance Corporation Ltd., India
- Lanco Infratech Ltd - India
- Electricity Authority, New Zealand
- Savvy Resources Ltd - HongKong
- Trasteel International SA, Italy
- Baramulti Group, Indonesia
- Petron Corporation, Philippines
- Central Electricity Authority - India
- Semirara Mining and Power Corporation, Philippines
- Meralco Power Generation, Philippines
- Uttam Galva Steels Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Cigading International Bulk Terminal - Indonesia
- Maheswari Brothers Coal Limited - India
- PNOC Exploration Corporation - Philippines
- SN Aboitiz Power Inc, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Indian Energy Exchange, India
- Meenaskhi Energy Private Limited - India
- Grasim Industreis Ltd - India
- Siam City Cement PLC, Thailand
- London Commodity Brokers - England
- Deloitte Consulting - India
- Mjunction Services Limited - India
- Eastern Coal Council - USA
- GVK Power & Infra Limited - India
- Salva Resources Pvt Ltd - India
- Romanian Commodities Exchange
- Goldman Sachs - Singapore
- Kobexindo Tractors - Indoneisa
- Aboitiz Power Corporation - Philippines
- Thiess Contractors Indonesia
- Ministry of Mines - Canada
- European Bulk Services B.V. - Netherlands
- Standard Chartered Bank - UAE
- Banpu Public Company Limited - Thailand
- Pipit Mutiara Jaya. PT, Indonesia
- ASAPP Information Group - India
- Essar Steel Hazira Ltd - India
- Metalloyd Limited - United Kingdom
- Kalimantan Lumbung Energi - Indonesia
- CIMB Investment Bank - Malaysia
- Orica Australia Pty. Ltd.
- Ceylon Electricity Board - Sri Lanka
- Tata Chemicals Ltd - India
- CNBM International Corporation - China
- Cement Manufacturers Association - India
- The State Trading Corporation of India Ltd
- OPG Power Generation Pvt Ltd - India
- Mercuria Energy - Indonesia
- Australian Commodity Traders Exchange
- Renaissance Capital - South Africa
- Pendopo Energi Batubara - Indonesia
- Economic Council, Georgia
- Parliament of New Zealand
- Kepco SPC Power Corporation, Philippines
- SMC Global Power, Philippines
- Ministry of Transport, Egypt
- Central Java Power - Indonesia
- Sakthi Sugars Limited - India
- San Jose City I Power Corp, Philippines
- Sojitz Corporation - Japan
- Karbindo Abesyapradhi - Indoneisa
- Medco Energi Mining Internasional
- Malabar Cements Ltd - India
- Formosa Plastics Group - Taiwan
- Directorate General of MIneral and Coal - Indonesia
- Africa Commodities Group - South Africa
- The University of Queensland
- Kartika Selabumi Mining - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Indian Oil Corporation Limited
- Commonwealth Bank - Australia
- Mercator Lines Limited - India
- Star Paper Mills Limited - India
- Bayan Resources Tbk. - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- ICICI Bank Limited - India
- Attock Cement Pakistan Limited
- Timah Investasi Mineral - Indoneisa
- Vijayanagar Sugar Pvt Ltd - India
- GMR Energy Limited - India
- Indika Energy - Indonesia
- Thai Mozambique Logistica
- Bhoruka Overseas - Indonesia
- Singapore Mercantile Exchange
- Aditya Birla Group - India
- Orica Mining Services - Indonesia
- Chettinad Cement Corporation Ltd - India
- Tamil Nadu electricity Board
- Samtan Co., Ltd - South Korea
- Globalindo Alam Lestari - Indonesia
- Heidelberg Cement - Germany
- Bangladesh Power Developement Board
- Chamber of Mines of South Africa
- Wilmar Investment Holdings
- Maharashtra Electricity Regulatory Commission - India
- Iligan Light & Power Inc, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Indogreen Group - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Oldendorff Carriers - Singapore
- Vedanta Resources Plc - India
- Borneo Indobara - Indonesia
- TeaM Sual Corporation - Philippines
- Miang Besar Coal Terminal - Indonesia
- Eastern Energy - Thailand
- Vizag Seaport Private Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Global Business Power Corporation, Philippines
- Antam Resourcindo - Indonesia
- Anglo American - United Kingdom
- Latin American Coal - Colombia
- Mintek Dendrill Indonesia
- Therma Luzon, Inc, Philippines
- Edison Trading Spa - Italy
- Interocean Group of Companies - India
- Binh Thuan Hamico - Vietnam
- Merrill Lynch Commodities Europe
- Ministry of Finance - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Energy Link Ltd, New Zealand
- Holcim Trading Pte Ltd - Singapore
- IEA Clean Coal Centre - UK
- GN Power Mariveles Coal Plant, Philippines
- Leighton Contractors Pty Ltd - Australia
- Kideco Jaya Agung - Indonesia
- New Zealand Coal & Carbon
- Australian Coal Association
- Offshore Bulk Terminal Pte Ltd, Singapore
- Makarim & Taira - Indonesia
- IHS Mccloskey Coal Group - USA
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