Published March 04, 2014 Emerging market slump a chance to invest: Maersk [COPENHAGEN] AP Moeller-Maersk A/S, Denmarks biggest company, is using a slump in emerging markets (EM) as an opportunity to invest, chief executive officer Nils Smedegaard Andersen said. When we invest in ports and other infrastructure projects, were often competing with financial investors, the 55-year-old CEO said in a phone interview. With fewer financial investors interested in growth markets, that can open up investment opportunities for us. Maersk, which owns a container line, a port operator and an oil division, invested about US$7 billion globally last year, focusing on emerging markets. This years rout from Argentina to India wont prompt the company to scale back its commitment to the group of countries, Mr Andersen said. I will travel a lot to emerging markets this year, which is where the biggest opportunities for infrastructure investment are, he said. His company employs 89,000 people in 135 countries. I was in Africa for a few weeks earlier this year and have scheduled travels to China and South America. Our investment strategy will focus on these growth markets. We have to think counter-cyclical. Investors have fled emerging markets this year as the US Federal Reserve pares its record stimulus measures. A slowdown in manufacturing in China and political unrest in Ukraine have added to the uncertainty. Global investors pulled US$3 billion from emerging-market funds in the week ended Feb 26, the 18th week of outflows, according to Citigroup, which cited data from EPFR Global. An exit by short-term investors from emerging markets will help buyers such as Maersk generate bigger returns, Mr Andersen said. In general, these financial investors tend to settle for lower returns than we do; we want double-digit returns. Maersks investments last year included container terminals in Brazil, Mexico and Russia and building up its oil exploration business in offshore Angola. When we invest in a port in a growth market, we spend a mix of the local currency and US dollars, so in the short term, our investment costs may be a bit lower, he said. And when the port is up and running, we tend to get payments in dollars in the transport industry, so in that way, were pretty well covered. Maersk is planning to shift some investments to its oil, ports and drilling businesses and away from its container line division, which has been hurt by overcapacity in the industry. Maersks earnings before interest and taxes fell to 9.46 billion kroner (S$2.2 billion) for the fourth quarter, the company said last week. - Bloomberg
Posted on: Tue, 04 Mar 2014 01:16:26 +0000
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