THE RISE OF ASIAN SHIPPING GIANTS

It was only a decade ago when an unexpected financial crisis gripped Asia and pushed the region into recession. Since then, the Asian economies have resumed strong economic growth with the renaissance of China and India. Companies are once again expanding, and stock markets in the region are skyrocketing driven by the influx of foreign capital and optimism over Asia’s future. [More...] While the current sub-prime crisis does pose a downside risk to global economic growth, underlying fundamentals of the Asian economies remain robust and sound. In its latest Global Economic Prospects report, the World Bank estimates the Asia-Pacific region to have grown about 10 percent in 2007, the strongest performance since 1994. Although a softening of US and European import demand could moderate growth, the bank expects the

region to expand 9.7 percent in 2008 and 9.6 percent in 2009. The burgeoning exports and ravenous demand for commodities from Asia have led an unprecedented boom for the shipping industry. Coupled

with port congestion and supply constraints at the shipyards, freight rates and asset prices have soared to levels never seen before by the industry. The record profits and escalating share prices of shipping companies in the region have also attracted investors to the industry which in turn provided another source of funding for aggressive fleet renewal and expansion plans.

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