Migrants

The world is on the move. There are 244 million people living outside their country of birth, according to new United Nations data, the highest figure ever recorded and an increase of 71 million since 2000. By 2050, that number could go as high as 590 million, according to U.N. projections, fed by war and economic deprivation in the poorest countries with the highest birthrates.

SCB exch rate

SGD to USD 1.416
USD to SGD 1.393
Spread about 1.6%

Overseas Education OEL

Enrolment 3000 in 2015, capacity 4800
ASP inc 5-10% pa
3# in Singapore with long history (30 competitors)
1/3 of students paid by corporate checks (2/3 a few years ago)
Only 1 of the 4 full IB programs in Singapore

Risks: Competition, loss of status as school moved from Orchard Rd to Tiong Bahru

Relook and Entry Prices

Oriental Land 4000
SAP 50
RB 5500

Alibaba and Wechat

400m users of alibaba spending US$400bn a year
Wechat also has 400m users

Singles day do US$14bn per year, 85,000 txn per sec during peak hours

Invest Plan 2016

100k in stocks - 5 bullets, 20k each
100k opportunistic

Look closely at: OEL IBM Benesse LYV PSON BLN Berkshire, Reckitt

Core stocks
1. Diageo
2. Heineken
3. Unilever
4. Nestle
5. Disney
6. Colgate
7. Adidas
8. Pepsi
9. SIE
10. IBM
11. SATS
12. Coach

November 28, 2015 9:55 pm JST

CEO in the news

Olam's humble Verghese has big plans for Africa

TOMOMI KIKUCHI, Nikkei staff writer

SINGAPORE -- Sunny Verghese, co-founder and CEO of Olam International, a Singapore-based commodities trader, knows Africa like no one else in the field. Starting with a cashew trading business in Nigeria 26 years ago, he has built up a commodities-sourcing and -processing network across the continent. Now he is looking at Africa again -- as a consumer market about to blossom.

     Making the most of the opportunity will not be easy. To gain financial support for his long-term goals, Verghese made a decisive move in August, joining hands with Mitsubishi Corp., welcoming the Japanese trading house as Olam's second-largest shareholder. To underscore the partnership, Verghese announced on Nov. 13 a joint venture would be formed in Japan.

     "We see Mitsubishi as a long-term strategic partner," Verghese said, calling the deal an "important next step" in aligning his goals with a set of like-minded shareholders. For Mitsubishi Corp. and its 20% stake, Olam is the gateway to Africa, an untapped market for the Japanese commodities giant.

    Despite Olam's rapid expansion during the past 26 years, the India-born Verghese lacks a gung-ho demeanor. Born to a middle-class family in Kerala, in South India, his petite stature, calm eyes and ready smile hardly present the image of an over-zealous deal-maker with global ambitions.

     In fact, Verghese's expansion strategy has always been a careful one, similar to planting one seed after another in a field.

     Risk management has been Olam's modus operandi since its beginnings. Verghese set foot in Africa in the mid-1980s, when he was sent to Nigeria by the Indian conglomerate Kewalram Chanrai Group to run its cotton business. Verghese saw an opportunity when the Nigerian government liberalized commodities trading as a means to boost its nonoil exports. Nigerian exporters had little knowledge of risk management mechanisms and would often default on contracts. "We felt that if we set up a reliable procurement network," Verghese said, "and delivered goods in a reliable and consistent way to customers in the developed world, we could establish and grow that business."

     Nigeria was where he nurtured the "blueprint in my mind to start Olam." There, he led the vertical integration of Kewalram Chanrai's cotton operation for four years, setting up plantations and processing facilities to rely less on imports for raw materials. He learned local integration better manages risks by fending off currency and other volatile markets.

     He founded his own company in 1989 along with his basic strategy -- integration in selective businesses. The name Olam is derived from a Hebrew word meaning "to transcend boundaries."

     "We integrate based on where the profit pool is," Verghese said. "And [by always] asking ourselves the question, 'Can we win if we go upstream or midstream?'"

     Olam now boasts a portfolio of 44 products in 65 countries, 24 in Africa. Starting with cashews, Verghese ventured into "neighboring" products like almonds and hazelnuts, eventually expanding into high-demand commodities like cocoa and coffee. Olam today is the world's leading supplier of cashews and sesame seeds as well as the largest trader of cocoa. The company sits among the top three global suppliers of coffee. 

Investors' blessing

There have been some lumps along the way. 

     In the 1990s, Olam was lured by a Singaporean government agency to set up a base in the island nation. With attractive tax incentives and plans to set up operations in Asia, Verghese moved Olam's headquarters from London to Singapore in 1996, eventually listing its stocks on the Singapore Exchange and welcoming Temasek Holdings, Singapore's sovereign wealth fund, as a major shareholder.

     In 2012, Olam was hit by its greatest crisis -- it came under attack by short-seller Muddy Waters, which accused Olam of irregular accounting practices to boost its bottom line. Olam's share price slumped over 20% soon after the accusation.

     "This whole bogy of trying to say that we have some kind of liquidity crisis cannot be corroborated," Verghese said at a press conference soon after the attack. But his manner was calm, as usual, and he showed little sign of stress. Verghese thanked Temasek for retaining its stake, calling the state fund's gesture "the biggest support I can ask for."

     Later, Temasek came to Olam's rescue by increasing its stake, at one point controlling over 80% through a consortium led by a Temasek-owned unit -- a move that reflected the state fund's support for Olam's long-term plans to invest and build up its business.

     More recently, another crisis set in: Commodity prices began plunging. Amid the downturn, Verghese managed to secure another investor, Mitsubishi Corp. "Olam's network of farmers, processing capabilities and distribution networks in Africa is very attractive, and its product portfolio is complementary to ours," said Hideyuki Hori, general manager of Mitsubishi Corp.'s Living Essentials Group.

     With the added stability of long-term shareholders, Verghese is aiming big. "In the past, we followed an approach called 'string of pearls,' where we do a chain of small-scale acquisitions," said Verghese. "Going forward, we will do fewer acquisitions, but we will do larger ones."

     Verghese would not elaborate but hinted upcoming investments will be made in Africa. He said Olam's packaged food business in Africa has "built a strong distribution network" over the past eight years by leveraging the company's existing channels for rice and other staples.

     These channels, it should be noted, have been built on a continent known for its lack of infrastructure.

     The world has long depended on Africa for its coffee, chocolate and other simple pleasures. Now Verghese is ready to invest big to tap the continent as a potential consumer market. Africa's middle classes are surging. Aligned with annual growth of around 8%, consumer demand is likely to add around $1.1 trillion to African gross domestic product by 2019. Ethiopia, Uganda and Nigeria are among the fastest growing markets, according to Deloitte, the big consultancy.

     Verghese considers his company to be one step ahead of other global food giants eyeing the African market. "When we started, they were not very interested in Africa," he said. "Now, they are very keen."

     Olam's African joint venture with Japan's Sanyo Foods is one of Nigeria's leading producers of tomato paste, candies, yogurt drinks and juices, to name only several of the company's products.

     Verghese said Olam and Mitsubishi Corp. will examine areas of collaboration in upstream, midstream and downstream African businesses. Bringing packaged food products produced by Mitsubishi Corp.'s subsidiaries is a possibility, he said.

     While analysts think Mitsubishi Corp.'s investment will help Olam to strengthen its balance sheet and go ahead with its long-term expansion plan, there are some short-term headwinds. OCBC Investment Research analyst Carey Wong said Olam's recent quarterly results fell "below expectations," with the company's dairy farming business underperforming and the packaged food business in Africa suffering from Nigeria's currency devaluation.

     "But there is definitely a shift in consumer behavior for packaged food" in Africa, Wong added. He continued that Olam's challenge is to differentiate its product lines from other brands as competition increases on the continent, then quickly react to changes in consumer behavior.

     "Olam's main wholesale business will benefit as global food companies produce more products in Africa, so it works both ways," Wong said, adding that Olam's diversified portfolio will help it weather downturns in the commodities market.

Vietnam ppty

First tranche 27 Nov 2015

Exch rate based on
SCB Viet book 22380
vs Google 22485

Spread 50bps

Transfer USD 17,800
VND 398,364,000
Amt needed 385, 989,056

First tranche actual: VND 400,244,000

Remainder 12,374,944 or c.USD 550

MemoryPower

System A

1. Grow Vegetables - bean sprouts straight up
2. Music Platform - 2: treble and bass
3. Photography - tripod
4. Druk - dragon with 4 legs
5. Family and Friends - F for Five, Five key members
6. Pottery - wheel throwing
7. Volunteer - seVen
8. Build Berkshire - BB8
9. Roundtable - Sep class Level 1 & 2
10. See the world - 10 cities, 10 years


System X

1. Meditate - One Mind
2. Write two notes - knowledge and task
3. 3 Sets of exercise - Chair, Crunch, Cobra
4. Read four news or newspaper - ST, FT, WSJ, NKI

Above to be done in the morning

5. Family Hug
6. Six syllabus mantra
7. Weigh to 70 kg
8. Eight 8 km run
9. Nine o'clock news
10. Sleep at ten pm!


Cities
1. Machu Pichu
2. Xian - World #2 Economy
3. Potala Palace - Third Gallery
4. Eygpt - 4 bases of the pyramid
5. Easter Island - E is #5
6. Gaudi La Sagrada Familia - Six tower tops
7. Niagara Falls - 7 looks like waterfall from side
8. Ayer Rocks - Ayer and 8 same sound
9. Jiu Zhai Gou - 9 and Jiu
10. Aurora

FT: Container shipping lines seek solace in greater scale

Container shipping lines seek solace in greater scale

Robert Wright in New York

Merger talks between CMA CGM and NOL highlight consolidation

A container ship passes under the Bayonne Bridge, heading for Newark bay

O

n the Bayonne Bridge, high above the water that connects New York harbour with New Jersey’s Newark bay, workers are starting to build a new roadway 64 feet above the existing one. This ambitious construction project will clear the way for the new generation of giant container ships to reach New Jersey’s bustling terminals, part of the US east coast’s busiest port complex.

The need to raise the Bayonne Bridge highlights how container shipping lines are betting on scale to solve their deep-rooted problems — partly by investing in bigger vessels and, in some cases, by embarking on mergers. The latest evidence of this came on Sunday when France’s CMA CGMannounced it was in exclusive talks to buy Singapore’s Neptune Orient Lines, a lossmaking line that operates under the APL brand name.

Many analysts say that a purchase of NOL — operator of just 2.6 per cent of the world’s fleet — might provide CMA CGM with little respite from these tough conditions.Yet the question for the industry is whether the quest for scale will alleviate or exacerbate a looming crisis resulting from the collapse in demand to ship goods to China, container shipping’s biggest single market. Average freight rates to move a forty-foot container on the world’s main east-west trade routes have nearly halved since August to about $840, as the industry’s capacity growth far exceeded demand.

Simon Heaney, research manager for Drewry Supply Chain Advisors, a London-based consultancy, says that container lines’ revenues are “absolutely tanking” as the rate to move a container plunges to the lowest level since the financial crisis of 2008-09. “We don’t see a lot of logic in this deal,” he says of the talks between CMA CGM and NOL. “APL is a chronic lossmaker.”

The thinking behind the expansion of both container ships and lines is nevertheless clear — both are ways of minimising the fixed costs of moving a container, and hence boost profit margins in a volatile, highly cyclical industry.

Big ships that are as long as 400m still require only one crew to operate and their fuel requirements and construction costs have risen far more modestly than the largest vessels’ capacity, which has doubled to 19,000 twenty-foot equivalent units of containers over the past 10 years. Such ships, when operating full, should be able to make money more easily even when freight rates are low.

“Big ships enable carriers to reduce their break-even level,” says Mr Heaney.

Similar logic applies to some companies’ determination to increase their share of the market. Shipping lines have formed alliances — similar to those between airlines — to pool cargo and ensure they can operate their vast new vessels as close to full as possible.

Company mergers should achieve a similar effect. Germany’s Hapag-Lloyd last year bought Chile’s CSAV, while China’s China Shipping Container Lines and Cosco — both state-controlled — are in talks about merging their companies to become the fourth-biggest line by capacity.

CMA CGM on Sunday said that, if it acquired NOL, it would contribute to the consolidation of container shipping “at a time when scale is more critical than ever”.

“It would further reinforce CMA CGM as a global force in container shipping, leveraging the strong geographic and operational complementarity of both groups,” said the company.

Yet the steady stream of mammoth new ships from shipyards in Korea and China may be helping to create the dire conditions from which CMA CGM and others are seeking protection. While Drewry forecasts a sharp fall in container trade growth because of China’s economic slowdown — from about 5 per cent in 2014 to 2.2 per cent this year — many in the industry see the flood of new ships as a still bigger problem. Drewry forecasts container ship capacity will increase 7.7 per cent this year.

Paul Slater, chief executive of First International, a ship finance consultancy, says the influx of huge, new vessels has increased the number of spaces available to containers on ships by an “extraordinary percentage”. “This is excess capacity driven,” he says of the slump in rates.

The rate decline prompted Denmark’s AP Møller-Maersk, owner of Maersk Line, the world’s biggest container ship operator by capacity, to last month issue a profit warning.

Harry Theochari, global head of transport for Norton Rose Fulbright, says CMA CGM — the number three container line — may be acting primarily from concern over Maersk’s market power. Alphaliner, an information site, estimates Maersk controls 14.7 per cent of container ship capacity. It has formed an alliance with Mediterranean Shipping Company, the market number two.

Maersk, which was initially competing with CMA CGM to buy NOL, has pulled out. CMA CGM originally wanted to form a three-way alliance with Maersk and MSC but it was rejected on competition grounds. “I think they’re just protecting their position,” says Mr Theochari, referring to CMA CGM.

There remain some positive reasons for CMA CGM to pursue a merger with NOL. Peter Tirschwell, editor of the Journal of Commerce, a trade periodical, points out NOL has a strong reputation in Southeast Asia and a powerful position in trans-Pacific routes.

Yet, according to Mr Heaney and many others in the industry, container shipping lines may, as the market slows, have far bigger things to worry about than continuing the dash for larger ships and companies.

“Being big as the market heads for a downturn is not a great position to hold,” says Mr Heaney. “By virtue of the fact that you’re moving that many boxes, the risk is magnified.”

Iron Ore 2015

Oversupplied by 150mt by 2018

BHP record pdtn 233mt

Vale building USD 16bn operations

Haze

By 

BEN OTTO

Updated Oct. 27, 2015 6:18 a.m. ET

5 COMMENTS

JAKARTA—Indonesia’s leader cut short his U.S. trip Tuesday, opting to skip meeting Silicon Valley executives to help manage an environmental crisis at home caused by the worst agricultural fires in years.

President Joko Widodo’s decision underscored the gravity of the growing disaster, as haze from the weeks-old fires spread in recent days to cover three-quarters of Indonesia’s territory, including the capital. It also has led to flight cancellations in Thailand and health warnings in the Philippines.

RELATED COVERAGE

• The Numbers: Indonesia's Haze
• Guns at Home or Air Pollution Abroad: An Expat Ponders Her Options

Mr. Widodo, who on Monday in Washingtonsignaled his country’s intent to join the Trans-Pacific Partnership trade pact, was to travel to California to meet with executives from Apple, Google and other companies. His office said that instead he would depart for Sumatra or Borneo, the two hardest-hit islands at home.

More than 40 million people on Sumatra and Borneo alone were exposed to the toxic haze, the government said. More than 500,000 people in Indonesia have sought treatment for respiratory problems since the fires began in September.

Hazardous smoke slowly swept across Southeast Asia in recent weeks, as blazes raged in Indonesia's peatlands. The WSJ's Diana Jou explains why this year’s peatland fires are causing longer periods of haze.

Most of the blazes are set by landowners about this time each year to make way for lucrative crops of trees for palm oil, pulp and paper.

They have been exacerbated by the El Niño weather phenomenon, which is prolonging the dry season. A short respite of rain might hit in the coming days, meteorologists said Monday, but the dry season is likely to last until late next month.

ENLARGE

NASA satellites have detected almost 116,000 fires in Indonesia this year, according to the Global Fire Emissions Database, a figure that has already surpassed 2006, one of the worst years on record.

The fires are largely on peat land, which store large amounts of carbon. On at least 26 days, estimated greenhouse-gas emissions from the fires were higher than average daily emissions from the entire U.S. economy, according to the World Resources Institute, a U.S. research organization.

“This is an amazing crime against humanity,” said Sutopo Purwo Nugroho, spokesman for Indonesia’s national disaster agency. He said it was unlikely the fires could be put out in the next two weeks.

Philippines President Benigno Aquino III said on Tuesday that there was little to be gained in castigating Indonesia for the pollution. He said he would rather help them address the problem “rather than concentrate on apportioning blame.”

In the wealthy city-state of Singapore, skies remained gray on Tuesday, with air pollution at unhealthy levels and likely to rise, the government said. Haze crept over the weekend into the greater Jakarta metro area, home to more than 25 million people.

Since the 1980s, the fires have been an annual occurrence on Indonesia’s vast agricultural lands, home to the world’s largest palm oil industry. Indonesia’s national disaster agency said 99% of the fires are caused by humans.

Golden Agri-Resources Ltd., one of Indonesia’s largest plantations and palm-oil companies, said the haze has limited the sunlight that trees need for photosynthesis. Whether that will damage crops won’t become clear until early next year.

ENLARGE

Planes on the tarmac of Jakarta’s International airport in Tangerang on Sunday. PHOTO: AFP PHOTO / BAY ISMOYOBAY ISMOYO/AFP/GETTY IMAGES

Scientists at the Indonesia-based Center for International Forestry Research said the cost could reach about $14 billion in environmental damage, health costs, lost business and other factors.

The vastness of the burning lands have hampered Indonesia’s response. More than 20,000 Indonesian personnel have been fighting the blazes and coordinating response.

For the first time in years, Jakarta has sought outside assistance, including from Singapore, Malaysia and Australia. The U.S. Embassy in Jakarta said this week it would give Indonesia $2.75 million in aid, including firefighting gear and technical advice from a U.S. Forest Service team.

Indonesia has also prepared navy ships to evacuate people as a last resort, if efforts to house evacuees in schools and government buildings equipped with air purifiers prove insufficient.

—Cris Larano and Lucy Craymer contributed to this article.

Ferrari

Only 7000 per year
500 only for its top model at EUR 1.4m
Cheapest at EUR 180k
30% of sales in R&D and capex
Mkt cap 6-10bn
OPM 14-16%
$50m profits from royalty stream

ICTSI

October 19, 2015 1:00 pm JST

International Container Terminal Services

Chairman makes global growth top priority for port operator

MINORU SATAKE, Nikkei staff writer

ICTSI, which operates a cargo terminal in the Manila port, is looking to expand its international presence.

MANILA -- Chairman Enrique Razon is looking to catapult Philippine port operator International Container Terminal Services into the ranks of global players and double sales within just five years.

     Razon's game plan includes building ports in Africa and Latin America, as well as a possible expansion into Greece and Iran.

     ICTSI's flagship Manila International Container Terminal is a key facility in the Philippine capital's port.

     Located in an area surrounded by slums, the 94-hectare terminal is equipped with state-of-the-art port machinery, including 14 large cranes. It can handle 2.6 million TEUs, or twenty-foot equivalent units, of cargo, per year. This puts it nearly on a par with Japan's Yokohama and Kobe ports in terms of cargo-handling capacity.

     ICTSI is currently building ports in four locations, including in Mexico and Colombia. The company is also exploring business opportunities in Greece and Iran.

     These moves are part of a growth strategy focused on expansion in emerging countries.

     ICTSI, which operates 30 ports in 20 countries, racked up $1.1 billion in sales in 2014. Razon wants to raise that figure to $2.2 billion in 2019.

Climbing the ladder

The port operator traces its roots to a cargo-loading business launched at the Manila port in the 1930s by Razon's grandfather, who had immigrated from Spain. Razon's father inherited the business and turned it into ICTSI in 1987. In addition to Manila, the company operates terminals at other major Philippine ports, including Subic.

     But despite controlling an overwhelming share of the domestic market, ICTSI is not yet on the same level as global giants like Hutchison Port Holdings of Hong Kong and PSA of Singapore.

     Since he took the helm at ICTSI in 1995, Razon has been pursuing aggressive international expansion.

     In addition to building ports in six Spanish-speaking Latin American countries, including Mexico, Razon is also betting big on the potential of African countries, starting operations in Congo, Nigeria and Madagascar. Africa, he says, still has much room for growth and development.

     At age 17, Razon dropped out of school and joined his father's company. He started out as a crane operator loading and unloading containers. This meant climbing up a high ladder under the scorching sun and working in a hot cockpit for hours, but Razon said he enjoyed the work even more than his current job as a chairman.

     When he was around 20, Razon spent a few years supervising a workforce of 2,000 Filipino at a port in Saudi Arabia.

     But Razon's confidence in his abilities to run ICTSI does not come from his on-the-ground experience alone. He said he is also proud of how he steered his company through the Asian financial crisis in the late 1990s.

     Faced with a mountain of debt, Razon was forced to sell eight port terminals in Mexico, Pakistan and other countries to CK Hutchison Holdings, a Hong Kong conglomerate.

     After surviving the financial crisis, ICTSI paid down its debt significantly and switched to making settlements in dollars. The company has since been expanding steadily but cautiously overseas.

     Razon is now trying to build up casino operations as a new revenue source. In 2013, the company opened Solaire Resort and Casino, a huge entertainment complex in the Manila port. It has also acquired a small casino in South Korea's Jeju Island, as well as two small islands in the Incheon Free Economic Zone.

     The casino business fits in well with Razon's business strategy because, like port facilities, it involves large-scale operations. It also gives him a chance to take advantage of his personal contacts in the Philippine government, which is seeking to develop a vast casino resort in the Manila Bay area, and the country's business community.

     Razon, always on the lookout for new opportunities, said he is confident his company can adapt to the business environment of any country. And confidence and adaptability are exactly what ICTSI will need to become one of the world's top players in its field.

October 10, 2015 12:05 am JST

International Container Terminal Services

More port contracts to offset weak trade growth

CLIFF VENZON, Nikkei staff writer

MANILA -- International Container Terminal Services (ICTSI) expects to double revenues in the next five years by taking on more port terminals abroad to insulate the company from faltering growth in global trade.

Enrique Razon, chairman and president of International Container Terminal Services, is expanding his company’s global footprint for growth even as trade weakens worldwide.

     A leading Philippine company, ICTSI runs 30 ports in 20 countries and breached $1 billion in revenues for the first time in 2014. "We hope to double our size in the next five years in terms of revenue," Enrique Razon, ICTSI's chairman and president, told the Nikkei Asian Review on Friday.

     Razon has set this ambitious target at a time when international trade is weakening. The World Trade Organization on Sept. 30 trimmed its 2015 forecast for volume growth in world merchandise trade to 2.8% from 3.3% due to the slowdown in China, which remains the world's largest exporter.

     "The target is not based on the growth of global trade, [but] on new terminals coming on line," said Razon. "We have grown in the last three or four years despite global trade hardly growing."

     ICTSI's gross revenues from port operations, such as cargo handling, have expanded by on average 20% over the last five years while global merchandise trade only averaged 9%, according to data from the United Nations Conference on Trade and Development.

     ICTSI has expanded in that time by taking over ports that were offered for privatization. The company has also taken on green field projects, and new terminals are under construction in Colombia, Mexico and Nigeria.

     The company is reviewing possibilities in Iran, and has participated in contract auctions in Africa and Greece.

     "Africa is a challenging place, but the growth rate is higher because it comes from a lower base," said Razon. "It's an environment that not many people can adapt to, so Africa is now a focus."

     Razon believes ICTSI's two decades managing ports in diverse markets gives it a vital advantage. 

MANILA -- International Container Terminal Services is giving up its Japanese operations as the Philippine port operator looks for more growth elsewhere.

     International Container Terminal Services on Tuesday said it sold back its 60% stake in Naha International Container Terminal to the company for 105.3 million yen ($884,400). The sale leaves six Japanese harbor transportation companies owning the Naha International Container Terminal.

     Naha International Container Terminal holds a 10-year lease from the Naha Port Authority to operate a terminal in Okinawa, Japan's southernmost prefecture. The contract will lapse by the end of this year, but extension talks are to start soon. Still, "ICTSI is no longer interested in participating in the ... negotiations," the company told the Philippine Stock Exchange.

     ICTSI did not elaborate on the move, and company representatives were not immediately available for comment.

     The Naha operation makes up only 0.066% of ICTSI's total assets.

     In its 2014 financial report, ICTSI said the Naha terminal does not have a stevedoring license, which Japan only issues to domestic companies. Hence, its revenue stream is limited to fees from wharfage and other ancillary services.

     The sale comes with ICTSI moving into faster-growing markets. Chairman Enrique Razon earlier said his company was bidding for terminals in Cameroon and Kenya. It already has concessions in Democratic Republic of Congo, Madagascar and Nigeria.

     The company, which operates 29 mostly midsize origin and destination ports in around 20 countries, has been withdrawing from underperforming ports.

     ICTSI last year canceled a contract in India after it deemed the business "had no effect on (its) global operations." In 2012, it pulled out of Syria due to the civil war there.

China's graduates

In 2014 and 2015, China produced more college graduates than in the last 25 years combined. 35% of Millennials will be graduates, 7m per year.

Bloomberg

Bloomberg, which declined to comment for this article, is a privately held company: the man whose name is on the door owns about 90 per cent of it. It was set up to deliver markets data to customers in financial institutions, who pay handsomely (up to $24,000 a year) for Bloomberg’s distinctive terminals. In 1990, the editorial side of the business, which now employs more than 2,400 people, was created to give terminal subscribers up-to-date news.

Michael Bloomberg made his first fortune as an equities trader and partner of Salomon Brothers, picking up a $10m windfall when the firm was sold in 1981. He immediately ploughed some of the proceeds into a new business venture — “a company that would help financial organisations,” he wrote in his 1997 autobiography Bloomberg by Bloomberg. The idea, he explained, was to collate market data and provide computer software “that would let non-mathematicians do analysis on that information”. This service would eventually come wrapped in a box with a screen: the Bloomberg terminal.

The terminal has become an essential cog in the engine that drives the financial system, with sales generating 80 per cent of Bloomberg revenues, which were an estimated $8.5bn in 2014, according to Douglas Taylor, founding partner of Burton-Taylor International Consulting. No surprise, then, that at the company’s Manhattan headquarters on Lexington Avenue, the terminal is viewed with near reverence. A glass-walled display charts the evolution of the devices from chunky 1980s original to the sleeker, matte models of 2015.

Today, the company accounts for 32 per cent of the global market in financial data and information. But its biggest customers — Wall Street’s leading investment banks — are grappling with tougher regulatory requirements introduced since the 2008 financial crisis, which have eaten into their profits. These banks want to cut costs where they can: several banking sources told the FT that their institutions were actively reducing the numbers of installed Bloomberg terminals and moving staff to cheaper alternatives.

Morgan Downey, formerly an oil trader and global head of commodities at Bloomberg, launched one such alternative last year. He describes Money.net, a browser-based tool (costing a flat $95 per month), as offering everything and more that Bloomberg does through its terminal.

Downey believes the $30bn financial-data industry — twice the size of the global music business — is at a similar stage to the US airline sector in the early 1980s, when the cost of flying economy from New York to Los Angeles dropped about 90 per cent thanks to a new generation of carriers. Similar price falls in Bloomberg’s core market are inevitable, he says, blaming the high cost of a terminal subscription on the company’s “silly spending” on other services, such as its business-news television network and radio station. “The terminal is the only thing that has worked,” he says. “Is it a good product? Yeah, it’s OK. But is it worth $24,000 a year? Heck no.”

With US competitors undercutting it at home, Bloomberg has looked elsewhere for growth. The number of global users stands at about 326,000 around the world, according to a spokesperson, and should end this year about 4,000 up on the year before, as the company pushes more deeply into newer markets in Asia and Africa.

The move stunned Bloomberg journalists. With his floppy hair and quietly spoken manner, Micklethwait did not resemble the warrior required to shake up the company’s news operation. From managing a staff of about 120 at the collegial Economist, where journalists’ egos are subjugated to the extent that there are no bylines, he suddenly found himself overseeing more than 2,000 editorial staff.

One Belt One Road

In some countries Beijing is pushing at an open door. Trade between China and the five central Asian states — Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan — has grown dramatically since 2000, hitting $50bn in 2013, according to the International Monetary Fund. China now wants to build the roads and pipelines needed to smooth access to the resources it needs to continue its development.

Mr Xi started to offer more details about the scheme earlier this year with an announcement of $46bn in investments and credit lines in a planned China-Pakistan economic corridor, ending at the Arabian Sea port of Gwadar. In April, Beijing announced plans to inject $62bn of its foreign exchange reserves into the three state-owned policy banks that will finance the expansion of the new Silk Road. Some projects, already on the drawing board, seem to have been co-opted into the new scheme by bureaucrats and businesspeople scrambling to peg their plans to Mr Xi’s policy.

On April 28 the commerce ministry announced that Silk Road countries account for 26 per cent of China’s foreign trade, a remarkably precise statistic. However, a request from the Financial Times for more specific details on the list of nations went unanswered.

China’s military is also eager to get its share of the political and fiscal largesse that accompanies the new Silk Road push. One former US official says he was told by senior generals in the People’s Liberation Army that the One Belt, One Road strategy would have a “security component”.

Projects in unstable areas will inevitably test China’s policy of avoiding security entanglements abroad. Pakistan has assigned 10,000 troops to protect Chinese investment projects, while in Afghanistan, US troops have so far protected a Chinese-invested copper mine.

Port construction in countries like Sri Lanka, Bangladesh and Pakistan has led some analysts to question whether China’s ultimate aim is dual-use naval logistics facilities that could be put into service controlling sea lanes, a strategy dubbed the “String of Pearls”.

in Xinjiang, the desert region that has 22 per cent of China’s domestic oil reserves and 40 per cent of its coal deposits.

Renaissance Technologies

The fund has about $1bn of assets, and has returned 1.75 per cent this year and 2.86 per cent annualised since its establishment in September 2007, according to a person close to the situation. But that is less than the almost 4 per cent average for managed futures funds and well below the industry’s best-known vehicles.

For example, Man Group’s $2.9bn AHL Evolution fund has returned more than 5 per cent this year and 15.3 per cent on an annualised basis since 2005, according to an HSBC report. Winton Capital’s flagship $11.8bn futures fund, managed by former physicist David Harding, has returned just 0.9 per cent in the year to September 23, but 13.85 per cent annually since 1997.

Southeast Asia's infrastructure dreams spark negotiating frenzy

A passenger train crosses the Chikubang Bridge as it travels from the Indonesian city of Bandung to Jakarta in West Java. © Reuters

China's "One Belt, One Road" initiative sounds great, in theory, to its Southeast Asian neighbors: billions of dollars for infrastructure projects and a mechanism for coordinating Chinese investment at a time when regional economic integration is deepening.

     The challenge is to maximize investment opportunities without sacrificing too much long-term political and economic flexibility.

     After all, these are complicated times for mainland Southeast Asia, with Thailand once again ruled by a military dictatorship, Vietnam seeking to carve out strategic rights in the South China Sea and Myanmar preparing for general elections in November.

     Chinese President Xi Jinping's ambitious initiative envisions a massive, well-connected economic zone spanning Asia and the Middle East.

     For Chinese deal-makers looking for projects under the scheme, Southeast Asia is an obvious starting point.

     Begin with Myanmar. In 2014, the country's bilateral trade with China hit a record $24.9 billion, according to estimates by trade economists. The Myanmar government says that approximately 80% of its foreign trade is with its northern neighbor. The value of this trade is thought to have increased twentyfold in the past decade.

     The oil and gas pipelines that run from Rakhine State in western Myanmar to the Chinese border at Ruili in Yunnan Province explains part of the recent increase. The gas pipeline was turned on in 2013, with the crucial oil link pumping from earlier this year. This energy now flows over the mountains of Myanmar's Shan State to Chinese towns and cities.

A pipeline that will transport gas from Myanmar to China is under construction outside of the northeastern Myanmar town of Pyin Oo Lwin. © Reuters

   Yet other trade between the two countries has dropped off markedly this year, after a fresh outbreak of violence along the border put the brakes on cross-border business. This violence is a reminder that Myanmar's border areas often remain outside the central government's control. This adds to the uncertainty for investors, who cannot be sure what Myanmar's political future will bring.

Big plans

Nonetheless, development blueprints for Myanmar are crisscrossed by audacious schemes for dozens of new rail and road links. Some are designed to tie China into Southeast Asia, but they will also help with connections to India, Bangladesh and beyond.

     The worry is that it only takes a few political or economic hiccups on the Myanmar side of the border before these grand plans are greatly delayed, or put on hold, as the Chinese backers of the suspended $3.6 billion Myitsone dam project discovered. Myanmar's President Thein Sein suspended the project after widespread domestic and international protests highlighted serious environmental concerns about the dam.

     Thailand is another country due to play a major role in the One Belt, One Road initiative. This month will see construction start on a $10.6 billion fast-rail link from Yunnan in China, through Laos, across Thailand and on to the capital, Bangkok.

     China hopes this 867-kilometer railway will be operational by 2018, carrying passengers at a zippy 180kph. It helps that Thailand received almost 5 million Chinese visitors in 2014. The idea is that an extra 2 million Chinese will use the railway to visit Thailand each year.

     Such is the Buddhist kingdom's allure for the Chinese that they are quickly becoming the dominant group of foreign visitors, their numbers dwarfing those from any other country. China's increasingly mobile middle class likes what it finds in terms of food, entertainment, shopping, scenery and fun.

     These visitors are part of a long, unbroken chain of Chinese adventurers, opportunists and migrants who have contributed to Thailand's economic success. It is no surprise that other ambitious Sino-Thai projects are also on the drawing board.

     Earlier this year there was a surge of exuberance about reviving plans to cut a canal through the Isthmus of Kra in southern Thailand. This grand scheme comes with a daunting price tag: It would cost $28 billion and probably take more than 10 years to build. If achieved, the link would shave time and distance off the route from East Asia to the Indian Ocean, and relieve congestion in the narrow Strait of Malacca, long considered a point of vulnerability for global shipping.

     Perhaps China and Thailand will eventually find a way to deliver on such an extravagant plan, but the proposed link would require a huge commitment of resources from both countries for very uncertain returns.

Balancing act

That uncertainty also figures in the equation for Vietnam, given its difficult historical relations with China. Chinese figures suggest a new record for bilateral trade with Vietnam in 2014, perhaps as high as $83.6 billion. Despite the warm economic ties, the diplomatic relationship is far from easy.

     The memory of a brief border war in 1979 is mostly buried, however competing claims in the South China Sea are out in the open. As China asserts its claims to a vast maritime domain, Vietnam has looked for support from allies and neighbors who also feel threatened by China's geopolitical ambitions.

     Indeed, Vietnam has sought substantial Japanese support for airport, road and port facilities, opting to avoid putting responsibility for major transport infrastructure in Chinese hands. Grumbles about labor practices at Chinese-built power plants have also dampened Vietnamese enthusiasm for One Belt, One Road projects.

     Like others in the region, what the Vietnamese have found is that balancing immediate economic interests with long-term geopolitical concerns is never easy.

     These are today's multifaceted dilemmas for countries that stand to benefit from Chinese investment, but are wary of giving up hard-won sovereignty in the process.

     From this perspective, allowing the Chinese to build local links in a global chain of facilities and resources only makes sense if the local upside is significant. From Hanoi to Bangkok and Naypyitaw, everyone is looking to maximize their payoff from China's regional ambitions, while ensuring their long-term security and economic interests are protected.