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1、Q3 2012 infrastructure report issn 1750-5461 published by Business Monitor international Ltd. sinGapore INCLUDES BMIS FORECASTS Business Monitor International 85 Queen Victoria Street London EC4V 4AB UK Tel: +44 (0) 20 7248 0468 Fax: +44 (0) 20 7248 0467 Email: Web: http:/ 2012 Business Monitor In
2、ternational. All rights reserved. All information contained in this publication is copyrighted in the name of Business Monitor International, and as such no part of this publication may be reproduced, repackaged, redistributed, resold in whole or in any part, or used in any form or by any means grap
3、hic, electronic or mechanical, including photocopying, recording, taping, or by information storage or retrieval, or by any other means, without the express written consent of the publisher. DISCLAIMER All information contained in this publication has been researched and compiled from sources believ
4、ed to be accurate and reliable at the time of publishing. However, in view of the natural scope for human and/or mechanical error, either at source or during production, Business Monitor International accepts no liability whatsoever for any loss or damage resulting from errors, inaccuracies or omiss
5、ions affecting any part of the publication. All information is provided without warranty, and Business Monitor International makes no representation of warranty of any kind as to the accuracy or completeness of any information hereto contained. SINGAPORE INFRASTRUCTURE REPORT Q3 2012 INCLUDES 10-YEA
6、R FORECASTS TO 2021 Part of BMIs Industry Report the public-led US$44bn investment plan into Singapores suburban metro system is a case in point. ? Year-on-year growth continues to outperform global indicators. ? Business environment is highly regulated and rated, giving investors confidence. ? High
7、ly developed transport and energy sectors provide strong base for construction projects. ? A relatively skilled workforce. Weaknesses ? Singapore has a mature infrastructure market that contributes a smaller percentage to construction industry value than other Tier I countries. ? Singapores export a
8、nd retail-lead economy is still highly sensitive to external factors such as global consumer confidence. Reliance on power imports and rises in fuel prices create uncertainty in determining cost of construction inputs. Opportunities ? Overseas markets, notably developing Asian countries, will provid
9、e local firms with opportunities to avoid drastic downturns in revenues. ? The governments work to improve the country, as a services and transport hub, will help support future infrastructure projects. ? The governments clear intention to turn Singapore into a regional green energy hub will provide
10、 many job opportunities. Threats ? Low-cost competitors, particularly in China, threaten Singapores export-oriented manufacturing industry. This could adversely impact infrastructural investments around new manufacturing units. ? Events such as the surge in property values show the underlying volati
11、lity still present in the market. ? The regulatory environment in the Asia-Pacific region as a whole remains far below developed standards and could impact Singapores rating. ? A relatively saturated and mature market may make nearby under-developed neighbours a more attractive investment prospect.
12、Singapore Infrastructure Report Q3 2012 Business Monitor International Ltd Page 7 Market Overview Singapore Despite being one of the markets most severely hit by the global recession, Singapores construction sector has recovered due to government stimulus efforts that were implemented in 2010. Prosp
13、ects for the industry remain extremely strong, despite the official statistics agency revising down its estimates from 2006 onwards. This momentum is evident throughout the countrys construction sector, where investments are channelled into port infrastructure to bolster Singapores maritime primacy,
14、 as well as transport, tourism and residential construction. Singapore re-affirmed its status as one of Asias most attractive infrastructure markets, following the successful completion of the second of Temaseks power divestments. A clear commitment to government investment saw the market bounce bac
15、k after a sharp fall, and a rise in manufacturing helped to buoy the export sector. The government has also taken steps to ensure that it is in a position to take advantage when markets recover through investment in centres of excellence. As a result, it is thought that the government will be examin
16、ing ways to allow a new wave of immigrants to enter the country to meet demand in the infrastructure market. It is estimated that as many as 100,000 foreign workers will be needed to cope with the surge in construction, according to Le Monde. Singapore is aiming to achieve the worlds highest growth
17、rate, at 13-15% of GDP. The country is one of the smallest markets in the Asia-Pacific region in terms of population and demographics are an issue for the economy. Although the government hopes the population will reach 6.5mn in the coming decades (mainly due to an influx of foreign expats and highl
18、y skilled labour) the populations average age is forecast to increase as birth rates decline. The issue of immigration remains a sensitive topic in the country, with Singaporean Prime Minister Lee Hsien Loong quoted during an official visit to the US as stating: If we dont allow the foreign workers
19、in, you are going to have overheating. We have to accept that. Arguably, the mass investment witnessed primarily in transport infrastructure, linking the financial districts with resorts and residential developments can be seen as an incentive to attract larger numbers of foreigners into the economy
20、. Its economic foundations lie in an advanced electronics sector and a strong export-oriented manufacturing sector. This is a double-edged sword, as exemplified by the economys exposure to drops in global demand. However, Singapore remains a hub for the international maritime industry and has the se
21、cond busiest port after Shanghai. The rise of China and India has produced fierce competition in the region, Singapore Infrastructure Report Q3 2012 Business Monitor International Ltd Page 8 challenging the traditional competitive advantages that many of the original Asian Tigers enjoyed. However, S
22、ingapores strong business environment looks set to weather this challenge. Despite the small size of its infrastructure market, Singapore has achieved the top spot in the Asia-Pacific region for infrastructure, as the government has shown keen interest in spending to improve productivity growth. Loc
23、al expertise is also among the highest in the world (especially in the water utilities sector) a characteristic that is lacking in the majority of the other emerging markets in the region. The city state ranks second out of the 167 countries in BMIs global risk/reward ratings. The country has a high
24、ly developed transport system that it is expanding further. In terms of utilities, the market is quite small although it ensures adequate supply from oil and gas to meet domestic demand and it does not produce any natural resources. The construction sector has produced some of the most elaborate str
25、uctures in the Asia-Pacific region, and it is now further boosted by the tourism infrastructure. On the downside, the small size of the population has also given rise to concerns that demand will not be strong enough to yield the anticipated benefits from the investments in infrastructure, especiall
26、y as rising costs reduce the margins and lead to demand deficits. The Singaporean construction sector is characterised by a large number of small- and medium-sized contractors in fierce competition for a dwindling pool of contracts. A survey commissioned by the Building and Construction Authority (B
27、CA) revealed that there were 117 small- to medium-sized contractors (with more than 50 employees) per US$1bn of construction output. This is extremely high compared with other countries, for example Canada, which has 39 contractors per US$1bn output, and Japan, which has just 14. Competitive Landsca
28、pe By global standards, the main EPC (engineering, procurement, construction) companies in Singapore are small and typically serve as sub-contractors to major infrastructure projects in Singapore. Projects in Singapores transport infrastructure sector have been largely dominated by South Korean and
29、Japanese companies in the past. One of the most prominent South Korean companies involved in Singapores transport infrastructure is Samsung Corporation, which was the main contractor for the US$1.8bn Kallang/Paya Lebar Expressway, the longest underground expressway in South East Asia. It is involved
30、 in the Marina Coastal Expressway, winning two tunnelling contracts worth around US$716mn and US$635mn each. Other prominent South Korean construction companies include Ssangyong Engineering And Construction and Daewoo Engineering And Construction. Singapore Infrastructure Report Q3 2012 Business Mo
31、nitor International Ltd Page 9 Table: Singapore EQS Data Name Latest FY Earnings Market Cap (US$mn) Revenue (US$mn) Net income (US$mn) Total Debt/Ebitda Interest Coverage Ratio PE Ratio Hong Leong Asia 12/2010 469.3231 3747.913 88.38081 0.7874023 9.847334 5.662652 United Engineers 12/2010 418.7127 6
32、62.1803 136.7467 3.936572 13.88893 1.659968 Guthrie Gts 12/2010 388.3633 216.1434 85.62534 5.945909 4.79928 2.560573 Boustead Singapore 03/2011 329.7585 415.4049 39.27391 0.3600424 108.1713 13.98305 Yongnam Holdings 12/2010 233.1745 246.1472 39.9606 1.652689 18.84221 4.968944 Chip Eng Seng Corp 12/2
33、010 204.2912 350.4247 80.57645 9.714067 18.357 2.383826 Low Keng Huat Singapore 01/2011 174.5933 201.2734 60.45065 0 114.4396 3.099594 Lian Beng Group 05/2011 145.7132 388.4818 36.89682 2.34275 21.3564 3.311258 Pec 06/2011 140.3645 314.7885 24.85643 0.01402865 147.2014 5.546875 Wee Hur Holdings 12/2
34、010 137.5423 108.8672 15.25393 3.580146 - 31.09218 Okp Holdings 12/2010 127.7125 102.7376 12.45256 0.08068228 132.2355 8.307693 Yoma Strategic Hldgs 03/2011 124.691 8.433721 2.096964 -111.7895 -0.8776371 26.99115 Tiong Seng Holdings 12/2010 115.1449 185.3417 15.75416 3.001999 9.245844 6.466667 *exch
35、ange rates accurate as of 12/01/2012. Source: Bloomberg Singapore Infrastructure Report Q3 2012 Business Monitor International Ltd Page 10 Building Materials Global BMI View: Subdued conditions in developed markets and a fixed investment slowdown in China will precipitate a softening in demand for b
36、uilding materials in 2012. While dynamic growth in Asia and Latin America should see consumption of cement and steel at a global level remain relatively well supported, we expect price movement to be considerably more restrained. Indeed, weakening demand will compound problems for steel producers, p
37、articularly in developed markets, as excess capacity, high input costs and relatively low end product prices continue to squeeze operating margins. Key views: Global production and consumption levels are due to remain relatively well-supported by robust growth in Asia and Latin America. Robust Deman
38、d Outlook Cement Consumption Growth (% Y-o-Y) In Key Asian Markets e/f=BMI estimate/forecast. Source: USGS, UN, BMI. Rising per capita income, demographic growth, urbanisation and industrialisation are the key drivers behind Asias and Latin Americas building materials consumption story. This view is
39、 supported by our positive forecasts for Asias construction industry, which we expect to experience real growth of 5.3% and 7.2% in 2012 and 2013, respectively. Meanwhile cement consumption in Latin America is forecast to Singapore Infrastructure Report Q3 2012 Business Monitor International Ltd Pag
40、e 11 average around 6.5% between 2012 and 2016, according to BMI forecasts, having increased by an estimated 9.5% year-on-year (y-o-y) in 2011. We expect Indonesia and Brazil to be the outperformers within their respective regions over the medium to long term, given their size and economic growth tr
41、ajectory. The outlook for cement consumption in India is equally robust and we expect growth to average nearly 10% y-o-y between 2012 and 2016; however, there are a number of risks to the countrys outlook, due to an unconducive business environment. Weakness in Western European markets to inhibit a
42、sustained recovery in 2012 Having weakened significantly over H211, we expect cement and steel prices to remain under pressure through H112, at least. The effect of heavy public spending cuts and sluggish housing markets will continue to take their toll on the European construction and building mate
43、rials sector and inhibit any sustained recovery in demand. In addition to subdued levels of demand, we expect supply-side issues to remain a concern for the industry in 2012. This has resulted in a number of producers having to cut output either through mothballing or plant closures, and we expect t
44、his trend to remain in place over the near term. BMI notes that the key drivers of growth in European cement and steel consumption will come from the east, most notably Russia and Turkey. Still Stabilising Cement Price And Volume Variance, By Region, % (2010/11) *Weighted average like-for-like. Sour
45、ce: Holcim. Signs of life in the US present upside, but still a long way to go While the significant improvement in residential construction and encouraging economic data observed within the US offers encouragement for the countrys cement and steel producers, we believe optimism should be tempered.
46、BMI notes that although the fledgling recovery in residential construction poses upside risks to our near-term outlook, the effects of this tentative recovery on the building materials industry must not be overstated. Cement and steel production levels remain significantly below pre-2007 levels and,
47、 while we forecast a return to growth for the US construction industry in 2012 following seven Singapore Infrastructure Report Q3 2012 Business Monitor International Ltd Page 12 consecutive years of decline, it is likely to be minimal and does not represent a broad-based industry recovery. Chinas fi
48、xed investment slowdown drives push towards consolidation We expect demand for cement and steel in China to soften as the country undergoes a sharp slowdown in fixed investment. We expect the deceleration in investment and residential construction to continue into 2012 and 2013. Having witnessed an
49、estimated increase of 7.2% in crude steel production in 2011 and, following six consecutive months of decline through November 2011, we expect steel output growth to moderate to 4.3% in 2012. In addition to weakening demand, Chinese steel producers have had to contest with the high cost of raw materials - producer profit margins reached record lows in November 2011, according to the CISA - and the effect of continued overcapacity on local ste