China eyes Southeast Asia push with $10 billion Manila airport project

Above, passengers disembark from a Saudi Arabia Airlines plane parked at the tarmac of Ninoy Aquino International airport. Capacity at the Philippines’ main aviation gateway is at critical levels, although private sector proposals have been put forward for the airport’s expansion. (Reuters)
Updated 08 March 2018
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China eyes Southeast Asia push with $10 billion Manila airport project

HONG KONG: CLSA, the offshore platform of Chinese investment bank CITIC Securities, is working on the finance for a new $10 billion airport in Manila as part of its push into Southeast Asia and China’s ambitious Belt and Road initiative.
In an interview this week, CLSA chairman Tang Zhenyi said that CLSA also planned to open new offices in Vietnam, Pakistan and Dubai this year as the Asia-focused broker continued its expansion into investment banking.
Introduced in 2013, the Belt and Road project is aimed at building a modern-day economic “Silk Road,” connecting China by land and sea to Southeast Asia, Pakistan and Central Asia, and beyond to the Middle East, Europe and Africa.
Beijing has called on financial firms to develop overseas lending businesses to help connect China with old and new trading partners including the 10-member Association of Southeast Asian Nations (ASEAN).
The Manila airport project, to be developed south of the Philippine capital, is still awaiting government approval but CLSA has held preliminary talks with potential Chinese backers for the deal, Tang said.
“It looks like we are in good shape to do this. It’s a $10 billion minimum project,” he said. “Citic and CLSA are in the perfect position to talk with all the Chinese financial institutions.”
Tang and CLSA did not give the location or further details of the project. Local media have reported competing airport proposals are currently being studied by the Philippines government.
The involvement in the airport project by CLSA, which was bought by CITIC Securities in 2013, comes at a time it is aggressively expanding its investment banking advisory services beyond its broking origins, by leveraging its China ties.
“China has the capital, has the market. These countries have the need,” he said, referring to the ASEAN countries’ push to boost infrastructure investments.
Tang, who worked for China’s Ministry of Finance and for the World Bank in Washington before joining Citic Group in 2011, became chairman of CLSA in November 2016.
Last year, the company returned to its CLSA branding, dropping the name Citic CLSA, although it does operate as the international arm of CITIC Securities.
As part of its strategy to grab a bigger share of investment banking deals in Asia, CLSA is also in talks with Pakistan’s ministry of finance to help the country sell Panda bonds — debt sold by foreign entities to investors in mainland China.
Tang said CLSA is in the middle of a transformation, and plans to add up to 15 bankers in Southeast Asia this year as it seeks to diversify from its Chinese roots. Of its 120 current bankers, about 80 are involved with China-related projects and 40 with ASEAN business.
“We are hoping by adding more ASEAN content into the whole company, we will see it more 50-50 (between ASEAN and China).”


‘Get prices down’ Trump tells OPEC

Updated 20 September 2018
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‘Get prices down’ Trump tells OPEC

  • Trump highlights US security role in region
  • Comments come ahead of oil producers meeting in Algeria

LONDON: US president Donald Trump urged OPEC to lower crude prices on Thursday while reminding Mideast oil exporters of US security support.
He made his remarks on Twitter ahead of a keenly awaited meeting of OPEC countries and its allies in Algiers this weekend as pressure mounts on them to prevent a spike in prices caused by the reimposition of oil sanctions on Iran.
“We protect the countries of the Middle East, they would not be safe for very long without us, and yet they continue to push for higher and higher oil prices!” he tweeted.
“We will remember. The OPEC monopoly must get prices down now!”
Despite the threat, the group and its allies are unlikely to agree to an official increase in output, Reuters reported on Thursday, citing OPEC sources.
In June they agreed to increase production by about one million barrels per day (bpd). That decision was was spurred by a recovery in oil prices, in part caused by OPEC and its partners agreeing to lower production since 2017.
Known as OPEC+, the group of oil producers which includes Russia are due to meet on Sunday in Algiers to look at how to allocate the additional one million bpd within its quote a framework.
OPEC sources told Reuters that there was no immediate plan for any official action as such a move would require OPEC to hold what it calls an extraordinary meeting, which is not on the table.
Oil prices slipped after Trumps remarks, with Brent crude shedding 40 cents to $79 a barrel in early afternoon trade in London while US light crude was unchanged at about $71.12.
Brent had been trading at around $80 on expectations that global supplies would come under pressure from the introduction of US sanctions on Iranian crude exports on Nov. 4.
Some countries has already started to halt imports from Tehran ahead of that deadline, leading analysts to speculate about how much spare capacity there is in the Middle East to compensate for the loss of Iranian exports as well as how much of that spare capacity can be easily brought online after years of under-investment in the industry.
Analysts expect oil to trend higher and through the $80 barrier as the deadline for US sanctions approaches.
“Brent is definitely fighting the $80 line, wanting to break above,” said SEB Markets chief commodities analyst Bjarne Schieldrop, Reuters reported. “But this is likely going to break very soon.”