Showing posts with label financial markets. Show all posts
Showing posts with label financial markets. Show all posts

Friday, March 20, 2015

Emerging Market Infrastructure

Infrastructure in Emerging Market

On-going rebalancing in global economic power has given rise to unprecedented involvement in investment plans in infrastructure in the emerging markets. Though there are common drivers on infrastructure increase in emerging markets like the requirement of added infrastructure together with goals of sustaining the economic growth and managing the fast growing urbanisation, there is a vast difference in the environment and the challenges faced. While engaging in these opportunities, engineering and construction operations, infrastructure management companies, private materials and financial firms need to consider on –

• Who could be the right local and global infrastructure partners?

• What would be the differences in infrastructure in funding structures?

• How would the bid occur for mega projects?

• Are there any demands for green infrastructure?

For instance, as per PwC and Oxford Economics’ Capital Project and Infrastructure spending outlook to 2025 report, the Asian Pacific market, due to China’s growth is expected to represent around sixty percent by 2025 of the global infrastructure spending while Western Europe’s share is expected to decrease to less than 10% twice as from the last few years back. Infrastructure is defined in various emerging markets with provision to insights on goals, risks and opportunities, challenges that are connected with infrastructure developments in those markets, in PwC’s Emerging Markets Infrastructure Series.

Urbanization – Trend in Emerging Market 

Urbanization is the only trend in the emerging market which means that infrastructure needs to keep up with the pace. As the income tends to rise in several countries, there is a need to indulge in the purchase of cars and roads would tend to be used with the need to have new ones built.

 According to Magee, `in developing markets, private sectors tend to play an important role financially in roads, telecom and power plants and water as well as waste water investment would be critical. Water related companies tend to have a small part of infrastructure universe though are expected to become much more significant going ahead while in Europe, they are in the early stage of transforming power generation from coal. Germany on the other hand needs to make some headway since their nuclear power plant are closing, while China will have to gradually move away from coal incorporating cleaner energy sources from power generation’.

Country Risk/Infrastructure Risk

Emerging markets are about country risk while infrastructure risk is about not taking risk though in the case of infrastructure asset sector, there are provisions of investment and growth and the emerging markets are avenues where there is a great demand for infrastructure capital. Emerging market infrastructure investment does not have to carry the full country risk of the host nation. Sovereign risk is often under the coverage of sovereign risk insurance which is purchased in the commercial market or provided by International Financial Institute – IFI, like the World Bank or any other related global institution.

The net return on sovereign risk after the insurance premiums will exhaust the yield on the credit of the surety provider and when combined with structured project risk, on properly evaded investment, the net return would not probably reach 30% though it could almost reach 20% which according to an asset-based uncorrelated investment could be quite good. Those on the lookout for yield, emerging market infrastructure investment could be part of the solution and for those with global diversification; real assets could be another option to the various listed securities.

Tuesday, October 4, 2011

The Sugar Prices Boosted By The Financial Markets

 The sugar prices have benefited greatly from this week's wave of optimism that has reached the financial markets, this raw material is structurally more susceptible to fluctuations. The concerns weighing on investors again before the weekend, however, have reduced the rise. The latest figures from the Brazilian federation Unica, reports of a further slowdown in September of sugar production in Brazil, world's largest producer, have also allowed the prices to show an upward trend.

However, this weekend, the market's limited gains, concerns about the debt crisis in the European Union take precedence over other rights. Good crop prospects in India and Thailand are also specialists fear that the request is well below the offer. Analysts estimate that in fact the next harvest from these countries and Russia should rapidly offset by volume weakness in Brazilian production. Investors also expect a revival production of sugar beets in the European Union.

According to the International Sugar Organization (ISO), the excess production is forecast at 4.2 million tones during the period from October 2011 to September 2012.  Finally, on Friday at the lunch break, a tone of white sugar for December delivery was worth 657 pounds on the Liffe in London, against 623.30 pounds the previous week about the same time.  On the NYBOT-ICE U.S. per pound of raw sugar for March delivery traded at 25.19 cents against 24.30 cents a week earlier.