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Singapore Freight Transport Report Q3 2008Product Type: Market Research ReportPublished by: Business Monitor International Published: July 2008 Product Code: R302-3443 Description In May China Eastern Airlines said it was still negotiating the possible sale of an equity stake toSingapore Airlines (SIA) and it was likely the two companies would eventually reach an agreement.China Eastern chairman Li Fenghua gave no timetable for the deal, but suggested it would have to waituntil the airline dealt with top priority issues such as contributing to relief efforts in the wake of theearthquake in southwest China and preparing for the Olympic Games in August. In January ChinaEastern’s minority shareholders had rejected a proposal to sell a 24% stake in the airline to SingaporeAir and its parent company, investment agency Temasek, for US$920mn. A potential rival bid from theholding company that controls Air China had earlier been rejected. In a separate development, SingaporeAir said it was inviting offers to buy its 49% minority stake in Virgin Atlantic, majority controlled byBritish businessman Richard Branson, because the nine-year old investment was giving it poor returns.SIA had paid US$1.6bn to buy the stake in 1999. . BMI’s newly-released Singapore Freight TransportReport concludes that led by SIA, the country’s air freight volume will rise by an annual average of 9.8%throughout the five year 2008-2012 forecast period. Our airfreight forecast is based on a number of factors. Our forecast for economic growth in 2008-2012now stands at an annual average GDP increase of 5.1%. SIA has established itself as one of the world’smost profitable airlines, and should benefit from the introduction of the Airbus A380 superjumbo. Thestrategic move into China opens up new possibilities, while the budget airline sector is also lookingdynamic.. Maritime cargo growth will also be vigorous, expected to average 9.0% per annum in volume terms,despite a growing competitive challenge from Chinese ports. Overall, we now expect average annualgrowth in freight tonnage across all modes to total 5.8% in 2008-2012. With an aggregate score of 76.3out of a theoretical maximum of 100, Singapore scores well in the BMI freight rating for Asia Pacific,coming out comfortably above the regional average. Its strong points include low long-term political andeconomic risk and a strong regulatory environment, as well as a moderate, but healthy rate ofinfrastructure growth. For the 2008-2012 forecast period, we expect the transport and communications sector to continueoutpacing the economy as a whole in value terms. It will achieve average annual growth of 5.3%, versus5.1% for overall GDP. The total value of transport and communications GDP will rise to US$27.0bn innominal terms by 2012, representing 12.1% of Singapore’s GDP. Table of Contents |
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