Skyline
SENIOR MEMBER
- Joined
- Jan 8, 2011
- Messages
- 3,640
- Reaction score
- 0
- Country
- Location
Sri Lanka aims to create an Asian shipping hub capable of competing against Singapore and Dubai by pouring $3.4 billion into expanding ports with Chinese help, after the islands container volumes surged to a record.
President Mahinda Rajapaksas goal of capitalizing on the end of a 26-year civil war to build a trade gateway to emerging markets makes shares in John Keells Holdings Plc (JKH) and Aitken Spence & Co. Plc a buy, says NDB Aviva Wealth Management Ltd. Port revenue may almost triple to 72 billion rupees ($658 million) in 2015 from 2010, Standard Chartered Plc estimates.
Sri Lanka can transform its economy by boosting its ports infrastructure, said Samantha Amerasinghe, a Colombo-based economist at Standard Chartered. Peace provides an opportunity to take advantage of a historic shift that will put the island at the center of the biggest trade routes of the future.
The government forecasts rising cargo levels will enable transportation, including ports, to make up 40 percent of gross domestic product by 2020, a fourfold gain from last year. Economic growth reached a 32-year high of 8 percent in 2010 amid Chinese investment in roads and harbors. The Colombo All-Share Index is up 175 percent in the past three years, the worlds biggest gain.
Rajapaksa, whose armed forces defeated separatist rebels in May 2009, is seeking to take advantage of Sri Lankas position 31 kilometers (19 miles) off Indias southern coast. There lie the main shipping lanes linking the Far East, West Asia, Africa and Europe.
Port Strategy
Deeper berths, new terminals and increased efficiency in the capital, Colombo, and in southern Hambantota city will allow bigger, super-post-panamax ships to dock and transfer cargo more quickly to and from smaller vessels that carry goods for India and other emerging markets.
The government is seeking to close the gap with Singapore, the top container port in 2009, and Dubai, which ranked seventh, according to data from London-based Cargo Systems, a unit of Informa Plc. Container volumes in the city-state were more than seven times higher than in Colombo, which ranked 32nd.
John Keells stands to gain from managing a terminal at Colombo port and a 30 percent stake in Maersk Lanka Pvt. Ltd., a joint venture that includes Copenhagen-based A.P. Moeller-Maersk A/S, said Bimanee Meepagala, who helps manage the equivalent of about $250 million at NDB Aviva Wealth Management, in a phone interview on July 7.
Shares in John Keells, Sri Lankas biggest company by market capitalization, have climbed more than 32 percent in the past year. Aitken Spence, the islands biggest resort operator, which also has a ports unit, has risen 35 percent.
Postwar Recovery
Hayleys Plc (HAYL), which has a transportation and logistics arm, and logistics and travel business Expolanka Holdings Ltd. are also worth buying, said Meepagala. All the recommended companies and NDB Aviva Wealth Management are based in Colombo.
As good proxies to the countrys postwar recovery with solid balance sheets and experienced management teams, we are confident that both John Keells and Aitken Spences port business will continue to be the key beneficiaries in the long run, said Louis Lu, an analyst at Aberdeen Asset Management Asia Ltd. in Singapore.
China has tightened its embrace of Sri Lanka by committing at least $3.7 billion since 2005 for projects from ports to a power plant. The island has attracted rising powers since the 16th century for its access to pivotal maritime links, leading to colonization by the Portuguese, Dutch and British until independence in 1948.
Initial Phase
China pledged $306.7 million in 2007 to the initial phase of the tax-free port in Hambantota, the highest among donors that also included the Asian Development Bank, Japan and Denmark, figures from Sri Lankas Ministry of Finance & Planning show.
The island expects an $808 million loan from Export-Import Bank of China to help pay for the next leg, Sri Lanka Ports Authority engineer Agil Hewageegana said yesterday.
Container volume in Sri Lanka surged 22 percent in 2010 to 4.16 million 20-foot equivalent units, according to the ministry. Last years level was a record, Sri Lanka Ports Authority Chairman Priyath Wickrama said in a June interview. It is expected to rise 10 percent in 2011 and as much as 20 percent next year, with target capacity for the capital and Hambantota combined set at 12.8 million units by 2015, he said.
Hambantota is the most suitable location to feed the Indian subcontinent, Wickrama said. A combination of Colombo and Hambantota will compete with Dubai, Salalah and Singapore. Salalah is the port of Oman. (........)
Sri Lanka Seeking to Catch Singapore With China: Freight Markets - Bloomberg
President Mahinda Rajapaksas goal of capitalizing on the end of a 26-year civil war to build a trade gateway to emerging markets makes shares in John Keells Holdings Plc (JKH) and Aitken Spence & Co. Plc a buy, says NDB Aviva Wealth Management Ltd. Port revenue may almost triple to 72 billion rupees ($658 million) in 2015 from 2010, Standard Chartered Plc estimates.
Sri Lanka can transform its economy by boosting its ports infrastructure, said Samantha Amerasinghe, a Colombo-based economist at Standard Chartered. Peace provides an opportunity to take advantage of a historic shift that will put the island at the center of the biggest trade routes of the future.
The government forecasts rising cargo levels will enable transportation, including ports, to make up 40 percent of gross domestic product by 2020, a fourfold gain from last year. Economic growth reached a 32-year high of 8 percent in 2010 amid Chinese investment in roads and harbors. The Colombo All-Share Index is up 175 percent in the past three years, the worlds biggest gain.
Rajapaksa, whose armed forces defeated separatist rebels in May 2009, is seeking to take advantage of Sri Lankas position 31 kilometers (19 miles) off Indias southern coast. There lie the main shipping lanes linking the Far East, West Asia, Africa and Europe.
Port Strategy
Deeper berths, new terminals and increased efficiency in the capital, Colombo, and in southern Hambantota city will allow bigger, super-post-panamax ships to dock and transfer cargo more quickly to and from smaller vessels that carry goods for India and other emerging markets.
The government is seeking to close the gap with Singapore, the top container port in 2009, and Dubai, which ranked seventh, according to data from London-based Cargo Systems, a unit of Informa Plc. Container volumes in the city-state were more than seven times higher than in Colombo, which ranked 32nd.
John Keells stands to gain from managing a terminal at Colombo port and a 30 percent stake in Maersk Lanka Pvt. Ltd., a joint venture that includes Copenhagen-based A.P. Moeller-Maersk A/S, said Bimanee Meepagala, who helps manage the equivalent of about $250 million at NDB Aviva Wealth Management, in a phone interview on July 7.
Shares in John Keells, Sri Lankas biggest company by market capitalization, have climbed more than 32 percent in the past year. Aitken Spence, the islands biggest resort operator, which also has a ports unit, has risen 35 percent.
Postwar Recovery
Hayleys Plc (HAYL), which has a transportation and logistics arm, and logistics and travel business Expolanka Holdings Ltd. are also worth buying, said Meepagala. All the recommended companies and NDB Aviva Wealth Management are based in Colombo.
As good proxies to the countrys postwar recovery with solid balance sheets and experienced management teams, we are confident that both John Keells and Aitken Spences port business will continue to be the key beneficiaries in the long run, said Louis Lu, an analyst at Aberdeen Asset Management Asia Ltd. in Singapore.
China has tightened its embrace of Sri Lanka by committing at least $3.7 billion since 2005 for projects from ports to a power plant. The island has attracted rising powers since the 16th century for its access to pivotal maritime links, leading to colonization by the Portuguese, Dutch and British until independence in 1948.
Initial Phase
China pledged $306.7 million in 2007 to the initial phase of the tax-free port in Hambantota, the highest among donors that also included the Asian Development Bank, Japan and Denmark, figures from Sri Lankas Ministry of Finance & Planning show.
The island expects an $808 million loan from Export-Import Bank of China to help pay for the next leg, Sri Lanka Ports Authority engineer Agil Hewageegana said yesterday.
Container volume in Sri Lanka surged 22 percent in 2010 to 4.16 million 20-foot equivalent units, according to the ministry. Last years level was a record, Sri Lanka Ports Authority Chairman Priyath Wickrama said in a June interview. It is expected to rise 10 percent in 2011 and as much as 20 percent next year, with target capacity for the capital and Hambantota combined set at 12.8 million units by 2015, he said.
Hambantota is the most suitable location to feed the Indian subcontinent, Wickrama said. A combination of Colombo and Hambantota will compete with Dubai, Salalah and Singapore. Salalah is the port of Oman. (........)
Sri Lanka Seeking to Catch Singapore With China: Freight Markets - Bloomberg
