Posts Tagged ‘Freight Traffic’
Sunday, April 1st, 2012
Emerging Markets Radar (April 2, 2012)
- China’s State Council has provided Wenzhou City a policy to naturalize private lending with new forms of small financial institutions. China is in the process of launching outbound direct-investment channels and setting up regional capital markets to trade non-listed shares, technology and art products over-the-counter.
- Companies in Internet, casino, and banking sectors have mostly beat market estimates so far in the Hong Kong earnings season.
- The Shanghai Shipping Exchanged released data this week showing strong momentum in China’s freight traffic. In addition, Alphaliner reported Maersk halted North Europe-Asia bookings due to a capacity crunch led by skipped sailings in previous months.
- Thailand exports rose 0.91 percent in February, unexpectedly rebounding as factories continue to resume production after last year’s floods. January saw a 6 percent slide in the figure and the median Bloomberg estimate was for a 5 percent contraction. In addition, imports rose 8.25 percent.
- Hong Kong’s February trade growth surprised on the upside. HK exports were up 14 percent and imports 20.8 percent during February, notably better than the consensus expectation.
- Due to extremely low valuation multiples for Chinese companies listed on U.S. exchanges, major shareholders of these companies have come out to buy out these companies. The latest was Zhongpin’s chairman, who offered to buy out the company for about $418 million, or $13.50 per share. The trend may continue if those companies don’t see their multiples re-rated.
- With liquidity and growth fears easing, the Polish Banking Sentiment Index has improved after a 30 percent decline in the fourth quarter, according to Bloomberg. Recent acquisitions by Santander of Kredyt Bank and by Raiffeisen of Polbank, in conjunction with Poland’s underpenetrated banking market and higher growth rates vs. the eurozone, have driven the rebound.
- South Africa’s economic growth is less than half the level the government says is needed to make inroads into the highest jobless rate of the 61 countries tracked by Bloomberg. At 24 percent unemployment, investors are being pushed to consider alternatives from Australia to Peru.
- The S&P downgraded South Africa’s outlook to negative on structural economic and social problems. The finance minister had listed narrowing the fiscal deficit among his priorities this year, in addition to reducing unemployment and providing moderate tax relief. As rising wages discourage investment, lower revenues will constrain the government’s efforts to meet ambitious goals for job creation.
- January-February profits for industrial companies in China were said to be down 5.2 percent this year versus 25.4 percent increase during this period last year. This raised concerns about a “hard landing,” especially in Hong Kong where sentiment is worsening.
- Recent vegetable prices in China were at historic highs, which may mean the next consumer price inflation (CPI) data may tick higher, reducing the scope for China to relax its currently tight monetary policy.
- The Taiwan government has agreed to put a capital gains tax for stock price appreciation at the top of its agenda. At 3.3 percent of GDP, the Taiwanese government is running the highest budget deficit in Asia and a new source of money is needed.
- Shippers have been able to raise container freight rates this year after removing capacities away from the market. Container liners have been losing money due to a severe freight rate slump following overbuilding in global capacity during the boom-bust cycle. At the current rate, shippers are able to breakeven and may make money if rates and volumes continue to increase.
- Brazil’s central bank President Alexandre Tombini said the country’s labor market can accommodate faster economic growth now that policymakers are forecasting for the second half of the year.
- Russia’s entry into the World Trade Organization (WTO) will add about $162 billion to the country’s economic output each year as market access and foreign investment improves.
- According to Merrill Lynch, the opportunity for active stock pickers to add value in global emerging markets is now increasing (see chart). This performance opportunity refers to dispersion of returns and how large or small the opportunity is between outperforming and underperforming assets. The opportunity to add value from small-sized companies has consistently been higher than the opportunity to do so from large ones.
- Hungary would undermine its credibility by selling eurobonds before obtaining a loan from International Monetary Fund (IMF), the CEO of OTP warned. OTP is the Hungary’s largest bank.
- South Africa’s power supply constraint has the potential to act as a “hand brake” on the country’s GDP growth outlook and is an “underappreciated” downside risk, a domestic banking group warned. In fact, Absa Capital economist Jeffrey Schultz says that the power shortfall is one of the “idiosyncratic” factors that is likely to act as a drag on domestic economic expansion during 2012, as well as over the medium term. It was also a factor in the Barclays affiliate’s decision to revise its GDP outlook downward for 2012.
Tags: Art Products, Bloomberg, Brazil, Capital Markets, Chinese Companies, Contraction, Earnings Season, Emerging Markets, Europe Asia, Eurozone, Financial Institutions, Freight Traffic, Internet Casino, Investment Channels, North Europe, Polbank, Private Lending, Raiffeisen, Regional Capital, Russia, Sentiment Index, Thailand Exports
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Saturday, June 4th, 2011
Energy and Natural Resources Market Cheat Sheet (June 6, 2011)
- The Air Transport Association (IATA) data for April showed a strong resurgence in air traffic with freight traffic growing by 5.4 percent and international passengers increasing 16.5 percent year-over-year. International passenger traffic has climbed to 7 percent above pre-recession peaks.
- The U.S. Mint sold 3.65 million ounces of American Eagle silver coins in May, a rise of 30 percent from April’s 2.82 million ounces.
- According to the International Monetary Fund (IMF), Russia raised its gold reserves by 13.7 tons in April to 824.8 tons, and Mexico increased its gold reserves by 5.9 tons in April to 106.1 tons.
- The Aluminum Association’s producer shipment and inventory data for April showed that the pace of growth in North American shipments of ingot and mill products increased by 10 percent year-over-year.
- Japan’s refined copper exports plunged 51 percent from a year earlier to 23,582 tons in April, for the seventh straight month of year-over-year declines.
- According to the Indonesian Coal Mining Association, Japan is expected to import 57 million to 58 million tons of coal from Indonesia this year, down from previous peaks of around 65 million tons.
- According to industry data from the China Electricity Council (CEC), five major power generating companies suffered losses of 10.57 billion yuan from January through April. This is a loss of 7.3 billion yuan greater than the previous year, and increasing coal prices stand to make matters worse for the power generating companies.
- Russian coal exports to China may increase by 30 percent in the next 5 years. Russia exported about 11.6 million tons of coal last year to China at an average cost of $130 per ton, including both steam and coking coal varieties. The deliveries may increase to 15 million tons per year during the next five years and may even increase to 20 million tons.
- China’s steel demand may increase to between 670 and 750 million tons by 2015. This estimate is based on the assumption that China’s economy will grow at a rate of 8 to 9 percent year-over-year in the next five years. The first four months of this year saw China’s steel production grow by 8.3 percent year-over-year.
- Saudi Arabia’s Oil Minister Ali Al-Naimi gave a speech this week in Poland ahead of the OPEC meeting in Vienna next week. He indicated that the OPEC nation will invest $125 billion in the next five years on both upstream and downstream assets to continue to meet the world’s oil needs. Minister Al-Naimi indicated that OPEC continues to maintain 3 to 3.5 million barrels per day of spare capacity to meet any market shortages.
- BHP Billiton is facing the first strike at its Australian coal mines in a decade. About 4,000 members of the Construction, Forestry, Mining and Energy Union at all seven mines in the Bowen Basin in Queensland State, owned by BHP Billiton Mitsubishi Alliance, will vote to give the union power to take industrial action.
- China’s NDRC decided to raise electricity prices for industrial, commercial and agricultural users by 4 to 5 percent this week. This is the first time has China raised electricity prices in more than a year, with the aim to maintain power supply and mitigate financial losses at electricity generators. Currently around 40 percent of the power generators are operating at a loss, therefore more tariffs hikes are likely.
Tags: Air Transport Association, Aluminum Association, Association Japan, Coal Exports, Coal Mining, Coal Prices, Coking Coal, Freight Traffic, Gold Reserves, Indonesian Coal, Ingot, International Monetary Fund, International Monetary Fund Imf, International Passenger Traffic, International Passengers, Inventory Data, Mining Association, Refined Copper, Silver Coins, U S Mint
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Thursday, November 4th, 2010
This week’s Emerging Markets Diary highlighted the growth of high-speed rails in China, with its recent launch of the line between Shanghai and Hangzhou. The Shanghai-Hangzhou line now lets passengers shrink their travel time to only 45 minutes for a distance of about 126 miles.
This chart from Nomura International illustrates part of China’s current five-year plan to expand its network of high speed rails. China already has the longest high speed rail system in the world with just under 2,200 miles of track but Beijing has plans to extend its high speed rail lines to a total of 8,078 miles by 2012. By 2020, some analysts expect the distance of high speed rail lines to stretch 12,427 miles.
Most surprising about this is the speed in which China has been able to lay the tracks. China’s first high speed line between Beijing and Tianjin just opened in 2008 and has already carried 40 million passengers, roughly 125,000 a day.
Traveling at 180 miles per hour, high-speed rails have cut the travel time between Shanghai and Beijing from 14 hours to 5 hours. These trains are also equipped with Wi-Fi and other amenities so businesspeople can continue to work while they travel.
Another large project underway is a rail line to the province of Xinjiang, in far western China. This 1,103 miles high speed rail line is important because it frees up the existing rail line for freight traffic. Xinjang’s 2.9 trillion tons of coal reserves make it one of the richest deposits in China and connecting these reserves with power hungry cities along China’s coast is essential to making sure the lights stay on.
Recently, Beijing has ramped up efforts to develop China’s western regions. The Chinese government has been encouraging urbanization into the country’s interior regions by offering incentives such as tax free zones and building out the region’s infrastructure. Tourism into western provinces has also seen a bump, and retail development for luxury goods such as Hermes, Cartier and others has begun popping up across the western landscape.
This chart first appeared in this week’s edition of the Emerging Markets Diary.
Tags: Businesspeople, China, Chinese Government, Coal Reserves, Emerging Markets, Five Year Plan, Freight Traffic, Hangzhou, High Speed Rail, Interior Regions, Luxury Goods, Nomura International, Retail Development, Speed Line, Tianjin, Travel Time, urbanization, Western China, Western Provinces, Western Regions, Xinjiang
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