BMI GPI View Playing Out
BMI View: APMT's stake in Russia's Global Ports Investment (GPI) is, as BMI predicted, already starting to have a positive impact on GPI's ports connectivity. APMT's sister company, the container carrier Maersk Line, has added the GPI-operated container terminal at the port of Vostochny to its Transpacific 7 (TP7) service.
The Russian Far East port of Vostochny is --- after the port of Yokohama --- the second port of call on Maersk Line's TP7 service, which offers the Russian port connections to ports in Taiwan, Hong Kong, China and South Korea, before crossing the Pacific to link in with the Central American ports of Balboa and Panama then sailing into the Gulf with calls at Miami, Savannah and Charleston. On the return leg from the US Vostochny is the second call after the port of Yokohama.
We released our view that an agreement awarding APMT a 37.5% stake in GPI would benefit the Russian port operator's container ports, as traditionally when APMT breaks into a market its sister firm Maersk Line follows by adding the port to its routes in September. Our view leads us to believe that box volumes at the port of Votochny will continue their bullish growth, increasing by 16.7% in January-October 2012 and that Maersk Line's involvement with GPI will boost the company's total container throughput which grew by 43.6% in 2011 to 1.34mn twenty-feet equivalent units (TEUs).
|APMT Stake Offers Upside|
|Global Ports Investment's Facilities Container Throughput (TEU) and y-o-y % Change|
BMI's positive view of APMT's impact on GPI is supported by investors. While GPI's share price ticked down on the news that DP World was to divest its stake in the port (October 24 2012), since then the company's share price has increased by 9% to US$13.5, as investors have realised that APMT is filling the void and via Maersk Line is increasing the port of Vostochny's connectivity.
|Investors Positive On AMPT Participation|
|Global Ports Investment Share Price (US$)|
We have long highlighted the port's growth potential. The facility has developed from a gateway into Russia via Asia, with the facility offering rail freight connections to Russia's main demand hubs and into Europe, on carrier's regional intra-Asia services into a port of call on lines' international routes. Zim offers connections between the port of Vostochny and Central and the East Coast of North America, while CMA CGM links the port with the US Gulf and the Caribbean and Latin America.
The growing interest in the port of Vostochny from container lines highlights BMI's view on the Far East of Russia, the development of which we believe will be a major driver of Russian growth in the medium term.
|Maersk Line||Zim||CMA CGM||CMA CGM|
|Source: BMI Research|
|TP7 (Vostochny a call on east and westbound leg)||ZCP (Vostochny a call westbound leg only)||Pacific Express 3 (Vostochny a call westbound leg only)||Pacific East Coast 2 (Vostochny a call westbound leg only)|
|Hong Kong||Panama Canal||Jacksonville||Port of Spain|
|Nansha New Port||Los Angeles||Vostochny||Vostochny|