Readings: Ship building, Credit card growth, Peak petro-dollars
The liquidity crisis in the US and now Europe is beginning to hit the shipping industry, with a $20 billion (Rs93,800 crore) investment plan by Indian shipowners to replace part of their ageing fleet and expand cargo capacity likely to end up being put on hold.
“Indian banks cannot lend money for longer periods. They can lend money only for two-three years, whereas shipping firms typically need money for tenures ranging between eight and 15 years,”
Typically, 20% of the cost of a ship is contributed by owners while the balance is financed with debt.
- Economic Times: Banks going slow on credit card hardsell
Amid fears of default rates going up in the wake of high inflation and global slowdown, banks and card issuers in India are going slow in issuing credit cards. Industry insiders indicate that the annual growth rate in the industry could slip to 20-25% by the end of FY09 from 30-35% being recorded over the last few years.
At present, the default rates for payments is around 7.5-9%, according to a CCMC data. Consumers in India spend an average of Rs 4,000 a month on their cards.
Indians spend just 1% of their total purchases through credit cards, while the world average stands at 9%. There are currently 25 million credit cards in the country of which only 40% is active.
- CFR: Peak petrodollars?
On a quarterly basis, the foreign asset growth of the oil exporters probably peaked in either q2 or q3 2008.
. . . the oil exporters will “break even” (neither adding to their foreign assets or dipping into their external savings) this year if oil is around $70 a barrel. That break even price though has been rising quickly — and it isn’t inconceivable that the break even price might be $75 or $80 a barrel next year (unless some folks with ambitious plans cut back in the big way; with rents up 65% this year in Abu Dhabi there is certainly a bit of froth in the market) and, well, the market price of oil could potentially be lower than that.The UAE has announced a similar $13.5b facility, a facility that is considered to be a “quiet” bailout of Dubai by the much richer sheiks of Abu Dhabi.
Hmm. I wrote about the importance of oil money for real estate & commodity bulls: ME / GCC Realty - Last man standing, or not? Imagine if we see a bust in 09 there.
Related Posts:
