Asian infrastructure stocks may rise in coming months<\/p>\n
Bloomberg, San Francisco<\/p>\n
Asian building and transportation companies maybe among the
\nregion's best-performing stocks in coming months as governments
\nboost spending on infrastructure, such as roads and power plants.<\/p>\n
PT United Tractors, an Indonesian maker of road-building
\nequipment, has climbed 31 percent in dollar terms this year, amid
\na 1 percent gain in the Morgan Stanley Capital International
\nAsia-Pacific Index. Italian-Thai Development Pcl, Thailand's
\nlargest construction company, has gained 33 percent.<\/p>\n
Governments in Indonesia, Thailand and India in the past year
\nhave said infrastructure spending is vital to spur economic
\ngrowth and vie with China for overseas investment.<\/p>\n
The three plan to spend more than US$340 billion in the next
\ndecade upgrading transport and power networks, in addition to
\nfunds allocated to rebuild in the wake of the Dec. 26 tsunami.<\/p>\n
\"There's going to be some significant infrastructure
\nspending,\" said Eric Sandlund, who manages $650 million in Asian
\ninvestments outside Japan for Columbia Management Advisors in San
\nFrancisco. Builders will benefit along with makers of cement and
\nheavy equipment and operators of toll roads, ports and airports,
\nhe said.<\/p>\n
Economic growth in Thailand, Indonesia and India has repaired
\ngovernment finances, hurt by the 1997-1998 financial crisis in
\nAsia that forced them to cut spending and reduce debt.<\/p>\n
Indonesia postponed 37 toll-road projects, according to a
\nreport in April 2004 by the Asian Development Bank. The Manila-
\nbased lender warned the country would face \"an infrastructure
\ncrisis\" if it failed to boost investment.<\/p>\n
India's economy may expand as much as 6.9 percent in the year
\nending March 31, the Ministry of Statistics and Programme
\nImplementation said on Feb. 7. The Thai and Indonesian economies
\nmay grow as much as 6 percent in 2005, according to forecasts by
\nthe countries' respective central banks.<\/p>\n
China increased infrastructure spending by 25 percent in 2003
\nto $325 billion, according to Chetan Ahya, an economist at Morgan
\nStanley in Mumbai. The total, including real estate, was nine
\ntimes what India spent.<\/p>\n
The outlays helped attract overseas investors. They pumped a
\nrecord $61 billion into China last year, a 14 percent increase
\nfrom 2003, government figures showed. India's government expects
\nits foreign direct investment to triple in the fiscal year ending
\nMarch 31 to $15 billion.<\/p>\n
Indonesian government estimated the country must spend as much
\nas $150 billion in the next five years on infrastructure. The
\ngovernment plans to spend $22 billion on 91 projects, such as
\nroads, rail lines and power plants, this year.<\/p>\n
The Jakarta Construction, Property and Real Estate index has
\nrisen 10 percent, more than double the 4.6 percent gain in the
\nbroader benchmark.<\/p>\n
United Tractors and Indonesian cement producers, such as PT
\nIndocement and PT Semen Gresik, may be among the stocks most
\nlikely to benefit from the projects.<\/p>\n
United Tractors \"is a classic infrastructure play,\" said David
\nRobinson, a director at Prodigy Capital Partners LLP in London, a
\nhedge fund with about $75 million in Asian stocks. United
\nTractors' shares rose 3.5 percent on Monday.<\/p>\n
Indocement, the country's second-largest cement producer by
\nsales, expects to sell as much as 12 percent more cement this
\nyear, according to Ria Sjahroni, corporate secretary. Last year,
\nsales rose 8 percent.<\/p>\n
Last month, the government said it would need more than $4.5
\nbillion to rebuild Nanggroe Aceh Darussalam and North Sumatra,
\nthe provinces hardest hit by the tsunami.<\/p>\n
In Thailand, Prime Minister Thaksin Shinawatra has pledged to
\nspend $39 billion on infrastructure projects in five years.<\/p>\n
On Feb. 12, The Nation newspaper report, citing Thaksin and
\nother government officials, said that Thailand will spend 521
\nbillion baht ($14 billion) in the next six years to expand
\nBangkok's railroad system.<\/p>\n
Siam Cement Pcl, Thailand's biggest producer, expects local
\ndemand to rise more than a minimum 8 percent forecast, Executive
\nVice President Kan Trakulhoon said on Feb. 2.<\/p>\n
In India, Prime Minister Manmohan Singh's government budgeted
\n$13 billion in the current financial year for building roads,
\nrailways, ports, airports and phone networks. The outlay amounts
\nto 12 percent of the country's $110 billion budget.<\/p>\n
\"Indonesia, Thailand, and India all earmarked fairly hefty
\ngovernment spending,\" said Edmund Harriss, who holds Asian shares
\nin about $400 million of stocks he manages at Guinness Atkinson
\nAsset Management in London.<\/p>\n
\"A lot of money will have to be spent.\"<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/asian-infrastructure-stocks-may-rise-in-coming-months-1447893297", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }