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Look to India for Returns, Not China's Belt-and-Road, Funds Say

Discussion in 'World Affairs' started by hembo, May 16, 2018.

  1. hembo

    hembo SENIOR MEMBER

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    Look to India for Returns, Not China's Belt-and-Road, Funds Say
    By Matthew Burgess and Alyssa McDonald
    May 16, 2018, 6:39 AM GMT+3
    • Xi initiative driven by geopolitics, not returns: Macquarie
    • India still poses challenges, says Canadian pension fund

    Some of Asia’s biggest infrastructure investors are seeing plenty of opportunities in India. In China’s mammoth Belt-and-Road initiative, however, not so much.

    India is a key market for Macquarie Group thanks to strong economic growth and state asset sales, said Frank Kwok, co-head of Asia Pacific at Macquarie Infrastructure & Real Assets. Hence its recent purchase of nine toll-roads with charges indexed to inflation.

    China’s Belt-and-Road, however is more driven by geopolitics than investment returns, he said at the Bloomberg Invest Australia summit in Sydney on Wednesday.

    “It’s very much a China-led initiative, but really it’s about the entire region,” said Kwok. “But because one of the main drivers is that it’s for China to exert its influence over the region, financial returns are probably not the top priority.”

    Asia’s developing economies will need to spend about $22.6 trillion on projects like roads, bridges, ports and railways over the 15 years to 2030 in order to maintain economic growth and reduce poverty, according to the Asian Development Bank. China has stepped in to fund some of those investments with Belt-and-Road.

    Grand Plan
    involves spending as much as $1.2 trillion on railways, roads, ports and power grids over the next decade, according to Morgan Stanley. The intent is to open new business opportunities for domestic companies and extend China’s reach -- even though the route cuts through multiple conflict zones and some of the world’s most corrupt countries.

    Still, India poses its own challenges, said Cyril Cabanes, head of Asia Pacific infrastructure transactions at Caisse de Depot et Placement du Quebec, Canada’s second-biggest pension-fund manager. He says the opportunity is clear, but the deals are slow to come.

    “The size of the market is well known, but the velocity of deals coming to market and getting done has been generally fairly low,” he said. “It’s not just about putting capital in, it’s about generating returns and then moving on to the next opportunity, which India hasn’t quite graduated to.”
     
  2. faithfulguy

    faithfulguy ELITE MEMBER

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    Investing in India is investing in failure. Just like India invest in LCA. You will lose even your underwear for trusting in India, a country that should not even exist.
     
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  3. rajiv sharma

    rajiv sharma FULL MEMBER

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    really , and i say china only have belt without pants in that so called mammoth pipe dream project which will be the biggest failure of this century . talk scene or i will reply you in same tone .
     
  4. xyxmt

    xyxmt ELITE MEMBER

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    What would one expect someone to say who has not been given access to Belt and road...any guess?

    I was not allowed to enter Sarena hotel, so I am staying at "Phaty Purena" hotel
    in my view, dollar to dollar, "Phaty Purena" is the best hotel :)
     
    Last edited: May 16, 2018
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