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Trendlyne Marketwatch
22 Aug 2023
Market closes flat, Aeroflex Industries' IPO gets bids for 6.72X of the shares on offer

Trendlyne Analysis

Nifty 50 closed at 19396.45 (2.9, 0.0%) , BSE Sensex closed at 65,220.03 (3.9, 0.0%) while the broader Nifty 500 closed at 16,905.25 (53.2, 0.3%). Of the 1,934 stocks traded today, 1,206 were gainers and 664 were losers.

Indian indices closed flat, with the benchmark Nifty 50 index settling just below the 19,400 mark. The Indian volatility index, Nifty VIX, fell below 12 points. Glenmark Pharmaceuticals closed 2% lower after its wholly owned subsidiary in the US signed an antitrust settlement with the Department of Justice (DOJ), Antitrust Division, to resolve all court proceedings involving historical pricing malpractices by former employees.

Nifty Smallcap 100 and Nifty Midcap 100 closed in the green, outperforming the benchmark index. Nifty Media and Nifty Metal closed higher than Monday’s levels. According to Trendlyne's sector dashboard, Telecommunications Equipment was the top-performing sector of the day.

Major Asian indices closed in the green, except for India’s BSE Sensex, which closed flat. European indices traded in the green. US index futures also traded higher, indicating a positive start to the trading session. However, Brent crude oil futures traded in the red, extending their losses from Monday.

  • Money flow index (MFI) indicates that stocks like Solar Industries India, Emami, Shyam Metalics and Energy, and Escorts Kubota are in the overbought zone.

  • Birla Cable and Dixon Technologies (India) touch their 52-week highs of Rs 298 and Rs 5,035 respectively. The former has risen 59.5% over the past month, while the latter increased by 17.8%.

  • Aeroflex Industries' Rs 351 crore IPO gets bids for 6.72X the available 2.3 crore shares on offer on the first day of bidding. The retail investor quota gets bids for 14.72X of the available 1.2 crore shares on offer.

  • Pyramid Technoplast's Rs 153.1 crore IPO gets bids for 18.29X the available 75.6 lakh shares on offer on the third day of bidding. The retail investor quota gets bids for 11.71X of the available 46.1 lakh shares on offer.

  • Prabhudas Lilladher lowers its 12-month Nifty 50 target to 20,735 from its earlier estimate of 21,430. The brokerage expects the domestic market to account for political risks as state and Lok Sabha elections approach. It also adds low earnings estimates due to floods and the late festive season as reasons for the target cut.

  • Newgen Software Technologies surges as it wins an international order worth $9,90,000 for licensing, product implementation, and support services.

  • Telecommunication stocks like GTL Infrastructure, Tata Teleservices (Maharashtra), Mahanagar Telephone Nigam, Tata Communications and Railtel Corp of India are rising in trade. Barring Optiemus Infracom, all other constituents of the broader sectoral index, S&P BSE Telecom, are trading in the green.

  • Glenmark Pharmaceuticals falls as its wholly owned subsidiary in the US signs an antitrust settlement with the Department of Justice (DOJ), Antitrust Division, to resolve all court proceedings involving historical pricing malpractices by former employees. The company will pay $30 million ( Rs 249 crore) in six instalments to the DOJ. It appears on a screener of stocks with declining quarterly net profit.

  • According to reports, one crore shares (33.1% equity) of SJS Enterprises, amounting to Rs 610 crore, have changed hands in a block deal. Evergraph Holdings and Sanders Consulting are likely the sellers in this transaction.

  • NBCC (India) surges more than 5% in trade and hits a 52-week high of Rs 51.4 per share. The stock ranks high on Trendlyne's checklist with a score of 77.3%. It is also in the strong buy zone. The company appears in a screener of stocks where analysts have upgraded their recommendations or target prices over the past quarter.

  • One97 Communications (Paytm) rises as it plans to invest in artificial intelligence (AI) for the development of an artificial general intelligence software stack. It aims to help financial institutes in identifying possible risks and frauds, while also protecting them from new risks arising out of advances in AI.

  • ICICI Securities initiates coverage on IIFL Finance with a ‘Buy’ rating and a target price of Rs 760, implying an upside of 28.8%. The brokerage is optimistic about the company’s growth prospects given its extensive footprint, diverse portfolio and asset-light approach. It expects the firm’s net profit to grow at a CAGR of 27% over FY23-25.

  • Lemon Tree Hotels rises to its all-time high of Rs 108.5 per share as it signs two new properties in Bhubaneswar and Kasauli. The Bhubaneswar property is expected to be operational by Q4FY25 and will be managed by Carnation Hotels while the Kasauli property will be operational by Q3FY24 under Lemon Tree Hotels.

  • Harsh Dugar, Executive Director of Federal Bank, notes a rise in deposit rates across the banking sector. He highlights strong demand from both rural and urban areas and expects the bank's loan growth to exceed the industry average by 4-5% and reach 18-20%. He adds that the net interest margin could be around 3.3-3.4% in FY24.

  • Tata Motors sees seven analyst target price upgrades and one recommendation upgrade in the past month. UltraTech Cement, Maruti Suzuki, ICICI Bank and Axis Bank see six analyst target price upgrades over the same time period.

  • Welspun Enterprises touches its all-time high of Rs 318.7 per share as it completes the acquisition of 50.1% stake in Michigan Engineers for Rs 137.1 crore from Authum Investment & Infrastructure and Sansaar Housing Finance.

  • Patel Engineering is rising as it bags an order worth Rs 1,275.3 crore through a joint venture from the Madhya Pradesh government. The order involves the construction and maintenance of infrastructure for drinking water supply and storage. The company’s share in the joint venture is worth Rs 446.4 crore.

  • Aeroflex Industries raises Rs 103.7 crore from anchor investors ahead of its IPO by allotting around 96 lakh shares at Rs 108 each. Investors include Nippon Life Insurance, Societe Generale, Bank of India Mutual Fund, Whiteoak Capital Mutual Fund and Winro Commercial India.

  • Nomura maintains its ‘Buy’ rating on Bharat Forge with a target price of Rs 1,157. The brokerage believes that the company has the potential to be a major defense exporter, and will witness exponential growth. It anticipates a strong ramp-up in the defense space in FY24-25.

  • Adani Enterprises rises as promoter Kempas Trade & Investment buys a 2.3% stake in the company. It now holds a 69.9% stake.

  • Ambuja Cements makes an open offer to acquire a 26% stake in Sanghi Industries for Rs 767.2 crore. The offer opens on September 29 and closes on October 13.

  • Brigade Enterprises is rising as it enters into a sale deed to acquire a 6.5-acre land parcel in Chennai to develop a residential project. The company shows up in a screener for stocks with consistently high returns over the past five years.

  • Union Bank of India’s board approves the raising of Rs 5,000 crore by issuing equity shares through the qualified institutional placement (QIP) route. The floor price is set at Rs 91.1 per share. The stock shows up in a screener for companies with high TTM EPS growth.

Riding High:

Largecap and midcap gainers today include Adani Power Ltd. (347.40, 6.94%), General Insurance Corporation of India (217.05, 5.59%) and Tata Communications Ltd. (1,782.15, 4.59%).

Downers:

Largecap and midcap losers today include Colgate-Palmolive (India) Ltd. (1,939.75, -2.69%), Union Bank of India (90.00, -1.96%) and Bharat Petroleum Corporation Ltd. (346.90, -1.46%).

Volume Shockers

22 stocks in BSE 500 are trading on high volumes today.

Top high volume gainers on BSE included Bharat Heavy Electricals Ltd. (111.05, 10.00%), Linde India Ltd. (5,765.75, 9.86%) and Tata Teleservices (Maharashtra) Ltd. (82.15, 8.52%).

Top high volume losers on BSE were J B Chemicals & Pharmaceuticals Ltd. (2,650.25, -0.58%), Brigade Enterprises Ltd. (589.40, -0.45%) and Solar Industries India Ltd. (4,359.40, -0.11%).

The New India Assurance Company Ltd. (131.20, 5.93%) was trading at 30.4 times of weekly average. Mahindra Lifespace Developers Ltd. (528.25, 3.51%) and General Insurance Corporation of India (217.05, 5.59%) were trading with volumes 15.9 and 11.9 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

43 stocks made 52 week highs,

Stocks touching their year highs included - Bharat Electronics Ltd. (133.30, 3.13%), Bharat Forge Ltd. (1,006.70, 2.72%) and Bharat Heavy Electricals Ltd. (111.05, 10.00%).

17 stocks climbed above their 200 day SMA including Tata Teleservices (Maharashtra) Ltd. (82.15, 8.52%) and KNR Constructions Ltd. (270.30, 5.79%). 4 stocks slipped below their 200 SMA including Elgi Equipments Ltd. (466.40, -1.83%) and TTK Prestige Ltd. (764.80, -1.37%).

 
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The Baseline created a screener Relative Underperformance versus Sector …
21 Aug 2023
This screener shows stocks with their Month Change % trading below their Sector Month Change %
 
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The Baseline created a screener Relative Underperformance versus Industry …
21 Aug 2023
This screener shows stocks with their Month Change % trading below their Industry Month Change %
 
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The Baseline created a screener Relative Underperformance versus Sensex …
21 Aug 2023
Stocks which underperformed the Sensex index over 1 month
 
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The Baseline created a screener Relative Underperformance versus Sensex …
21 Aug 2023
Stocks which underperformed the Sensex index over 1 week
 
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The Baseline created a screener Relative Outperformance versus Sector …
21 Aug 2023
This screener shows stocks with their Month Change % trading above their Sector Month Change %
 
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Trendlyne Marketwatch
21 Aug 2023
Market closes higher, Geojit BNP upgrades rating on CIE Automotive to ‘Buy’ from ‘Reduce’
Trendlyne Analysis

Nifty 50 closed at 19,393.60 (83.5, 0.4%), BSE Sensex closed at 65,216.09 (267.4, 0.4%) while the broader Nifty 500 closed at 16,852.05 (94.4, 0.6%). Market breadth is in the green. Of the 1,973 stocks traded today, 1,135 were on the uptrend, and 776 went down.

Indian indices maintained their gains from the afternoon session and closed in the green, with the Nifty 50 closing at 19,394. The volatility index, Nifty VIX, dropped by 1.5% and closed at 12 points. According to data released by the Telecom Regulatory Authority of India, the telecom industry’s adjusted gross revenue increased by 2.5% to Rs 64,494 crore in the March 2023 quarter.

Nifty Midcap 100 and Nifty Smallcap 100 closed in the green, following the benchmark. Nifty IT and Nifty Bank closed higher, compared to Friday’s closing levels. According to Trendlyne’s sector dashboard, healthcare equipment & supplies emerged as the top-performing sector of the day, with a rise of over 3.8%.

Most European indices trade in the green. US indices futures trade lower, indicating a negative start. German producer price index declines by 1.1%, against the contraction estimates of 0.2%. The numbers indicate cooling inflation in the Eurozone’s dominant manufacturing economy.

  • Reliance Industries sees a short buildup in its August 31 future series as its open interest rises 7.3% with a put-call ratio of 0.38.

  • The Central Bureau of Investigation (CBI) reportedly closes a case against Adani Enterprises and a former Chairman of the National Cooperative Consumer Federation. The case relates to alleged irregularities in awarding a contract for supplying imported coal to the Andhra Pradesh Power Generation Corp.

  • Aeroflex Industries, a diversified flexible flow solutions provider, opens for IPO subscription tomorrow. The price band for the issue is Rs 102-108 per share. The size of the issue is Rs 351 crore, comprising a fresh issue of Rs 162 crore and an offer for sale for Rs 189 crore.

  • PB Fintech, RattanIndia Enterprises and Swan Energy witness their operating profit margins improve by 34.8, 30.3 and 27.4 percentage points QoQ respectively in Q1FY24.

  • ABB India rises in trade today as it receives an order from Reliance Life Sciences to deploy automation and control solutions for its new biosimilars and plasma proteins manufacturing facilities in Nashik, Maharashtra. It appears in a screener of stocks with strong annual EPS growth.

  • Knowledge Marine & Engineering Works is rising as its arm bags four orders from various sand buyers from Bahrain. The orders are worth Rs 342.1 crore in total and involve the supply and sale of dredged marine sand.

  • Larsen & Toubro is rising as its hydrocarbon energy business bags an order worth Rs 1,000-2,500 crore from Saipem & Clough JV for the fabrication and supply of process and piperack modules for a 2.3 MMTPA urea plant for Perdaman Chemicals and Fertilisers. The company's heavy engineering business also secures multiple orders for the complete package of Urea Equipment for the same project.

  • Antique Broking downgrades its rating on Dr Reddy’s Laboratories to a 'Sell' with an unchanged target price of Rs 4,658. The brokerage cites competition in the company’s base business from H2FY24 and the lack of a launch pipeline with large-value products as reasons for the downgrade. It also adds that the current stock price already accounts for the upcoming opportunities in the US.

  • EIHand Praj Industries touch their all-time highs of Rs 236.9 and Rs 504.8 respectively. The former has risen by 10.6% over the past month, while the latter increased by 18.6%.

  • Pyramid Technoplast's Rs 153.1 crore IPO gets bids for 5.84X the available 75.6 lakh shares on offer on the second day of bidding. The retail investor quota gets bids for 6.52X of the available 46.1 lakh shares on offer.

  • Khurshed Yazdi Daruvala, promoter of Sterling and Wilson Renewable Energy, sells a 1% stake in the company in a bulk deal on Friday.

  • IT stocks like Persistent Systems, Mphasis, L&T Technology Services, Coforge and Wipro are rising in trade. All the constituents of the broader sectoral index, Nifty IT, are trading in the green.

  • Robert Sockin, Global Economist at Citi, anticipates higher interest rates to persist for a longer duration in the US.  He also highlights the possibility of one more rate hike from the US Federal Reserve.

  • Geojit BNP Paribas upgrades rating on CIE Automotive India to ‘Buy’ from ‘Reduce’ and raises the target price to Rs 576 from Rs 376. This implies an upside of 15.7%. The brokerage turns positive about the company’s prospects given its focus on expanding its EV portfolio, increasing business with existing customers and healthy order book.

  • Utilities stocks like Adani Power, Adani Transmission and KPI Green Energy rise more than 2% in trade. The broader S&P BSE Utilities index also trades more than 2% higher.

  • PNB Housing Finance rises more than 5% in trade as it resolves and fully recovers a large corporate non-performing account of Rs 784 crore (~1.3% of loan asset) through an ARC sale under the Swiss Challenge method. This is in line with the Reserve Bank of India (Transfer of Loan Exposures) Directions, 2021. It appears in ascreener of stocks with strong momentum.

  • Amish Shah, Head of India Research at BofA Securities, lists increased earnings growth expectations, a busy political calendar, and erratic monsoons as major risks for the domestic stock markets. He estimates the Nifty 50 to touch 20,500 in 2023. Shah is bullish on sectors like financials, industrials and staples and bearish on IT, utilities and metals sectors.

  • Bharat Forge hits a new all-time high of Rs 987.8 as its arm, Kalyani Strategic Systems, wins two export orders worth 93.9 million euros. The order is for the supply of components and armoured vehicle chassis over 18 months, subject to necessary government approvals.

  • Cholamandalam Investment & Finance Company rises in today's trade following the resolution of the dispute between the family branch of the late MV Murugappan and other members of the Murugappa family. The company appears in a screener of stocks with consistently high returns over 5 years.

  • Metal stocks like Hindalco Industries, NMDC, Jindal Steel & Power, National Aluminium Co and JSW Steel are rising in trade. Barring APL Apollo Tubes, all the other constituents of the broader sectoral index, BSE Metal, are trading in the green.

  • Jio Financial Services lists at Rs 265 on BSE and 262 on NSE today. The stock price has fallen since the listing and is currently trading in the lower circuit.

  • CLSA maintains its ‘Outperform’ rating on Titan Co with a target price of Rs 3,270, citing the company's aim to improve its reach through its subsidiary's acquisition. The brokerage adds that the firm is committed to building CaratLane as an integral part of its jewellery business. Titan acquired an additional 27.18% stake in CaratLane for Rs 4,621 crore on August 19, taking its holding to 98.28%.

  • Malav Ajitbhai Mehta, promoter of Infibeam Avenues, sells a 1.3% stake in the company via market sale.

  • Bharat Heavy Electricals wins an order worth approx Rs 4,000 crore from Mahan Energen (an arm of Adani Power) to supply equipment (boiler, turbine, generator) and supervise the erection and commissioning of 2x800 MW power project based on supercritical technology at Bandhaura, Madhya Pradesh.

  • Ashish Kacholia sells a 0.6% stake in SJS Enterprises for approx Rs 11.6 crore in a bulk deal on Friday.

  • KEC International surges more than 5% as it bags three orders worth Rs 1,007 crore in the Indian and overseas markets. The first order is for designing, engineering, procuring and constructing a multispecialty hospital in India. The second order is for a 380 kV Overhead Transmission line project in the Middle East, and the third involves supplying various types of cables in India and overseas.

Riding High:

Largecap and midcap gainers today include Adani Power Ltd. (324.85, 6.65%), Adani Transmission Ltd. (923.55, 5.92%) and Sona BLW Precision Forgings Ltd. (590.90, 4.24%).

Downers:

Largecap and midcap losers today include Delhivery Ltd. (407.40, -2.98%), Union Bank of India (91.80, -2.86%) and One97 Communications Ltd. (837.95, -2.55%).

Volume Shockers

25 stocks in BSE 500 are trading on high volumes today.

Top high volume gainers on BSE included Tamilnad Mercantile Bank Ltd. (572.30, 18.19%), Trident Ltd. (35.70, 10.19%) and Data Patterns (India) Ltd. (2,364.60, 9.55%).

Top high volume loser on BSE was Jindal Worldwide Ltd. (378.70, -2.17%).

Capri Global Capital Ltd. (760.20, 1.84%) was trading at 10.8 times of weekly average. Nuvoco Vistas Corporation Ltd. (340.10, 2.97%) and PNB Housing Finance Ltd. (657.90, 3.55%) were trading with volumes 9.9 and 7.9 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

32 stocks took off, crossing 52 week highs,

Stocks touching their year highs included - Bharat Forge Ltd. (980.05, 0.96%), Cera Sanitaryware Ltd. (8,570.00, 1.48%) and Emami Ltd. (535.00, 1.21%).

14 stocks climbed above their 200 day SMA including Trident Ltd. (35.70, 10.19%) and KNR Constructions Ltd. (255.50, 4.91%). 9 stocks slipped below their 200 SMA including Elgi Equipments Ltd. (475.10, -2.08%) and Aptus Value Housing Finance India Ltd. (266.60, -1.70%).

 
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The Baseline
21 Aug 2023
By Akshat Singh

China has been a naval power longer than some countries have existed - the Song Dynasty, dating back to the 12th century, had a permanent standing navy, with squadrons and fighting vessels. For China, aggression via sea is an old tactic, and its growing maritime presence around India in recent years has raised eyebrows.

China's naval strategy around India involves an expanding network of ports across the Indian Ocean, essentially encircling India and forming what experts have called the "String of Pearls". 

This not only positions China as a key regional player in the Indian Ocean but has also made any potential response from India more complicated.

The strategic significance of these Chinese or China-funded ports cannot be overstated, as they serve as crucial hubs for international trade, connectivity, and regional influence. It's important to note that the civilian ports China has invested in, must provide logistical support to the Chinese navy if required. The Chinese investments thus come with military commitments to China. 

This edition of Chart of the Week explores the key Chinese-operated ports in the Indian Ocean region, examining their growth, investments, and the broader implications for India and its neighbours. 

China encircles India, by investing in eight ports in the Indian Ocean

India’s neighbours are, Pakistan, Sri Lanka and Bangladesh. All three countries have received port investments from China. 

Under the China-Pakistan Economic Corridor (CPEC), China has invested in two Pakistani ports: the Gwadar port ($248 million investment) and the Karachi deep-water terminal ($550 million investment). 

China's engagement with the Gwadar Port has unfolded in two phases. The first phase took place from 2002 to 2006, involving a financial infusion of $248 million through foreign aid grants from the Chinese government and loans from the Export-Import (Exim) Bank of China. The second phase, initiated in 2013, remains undisclosed in terms of the invested amount. Under this agreement, China will be providing financial investment in exchange for a concession agreement to conduct operations at the port. 

The second port, the Karachi Deep Water Container Terminal, commenced its operations at Karachi Port in December 2016. The port was established through a public-private collaboration between Karachi Port Trust (KPT) and Hong Kong's Hutchison Ports. Its significance lies in providing optimal access to ships entering Karachi, which is strategically positioned in the CPEC under China's Belt and Road Initiative (BRI).

In addition, there is a direct investment pledge of $3.5 billion from the Chinese government in the Karachi Coastal Comprehensive Development Zone (KCCDZ) from 2021, according to reports. Unlike a conventional loan, this investment aims to transform the underutilised land of the Karachi Port Trust into a multi-purpose residential, commercial, and seaport infrastructure. 

Debt-ridden Sri Lanka has, thanks to its highly strategic location, two ports under Chinese influence: Hambantota Port and CICT Terminal Colombo. China has invested around $1.3 billion in the former and $500 million in the latter. State-owned China Merchants Port Holding (CMPH) is the contractor for both these ports. Hambantota Port received funding from China’s Exim Bank in two phases: an initial $508 million from 2007 to 2014, and a subsequent $808 million from 2014 onwards. Under the agreement, CMPH will get a 99-year concession agreement of $1.12 billion and 85% ownership of the port.  

Bangladesh also has two ports with major Chinese investments. The Chittagong Port and the Payra Port have investments of $400 million and $600 million respectively. Mongla Port is contracted out to China National Complete Engineering, another state-owned entity. It is one of the main seaports of Bangladesh, handling about 80% of the nation's export-import trade. 

As for the Payra Port, the construction and development of its core infrastructure started in 2016. The project was executed by two Chinese companies, China Harbour Engineering Company (CHEC) and China State Construction Engineering Corporation (CSCEC). CHEC was responsible for building the core infrastructure, which amounted to $150 million, while CSCEC undertook tasks such as fortifying riparian areas, reducing flood risks, and establishing housing, education, and health facilities, involving an investment of $60 million. 

Much like Pakistan, Myanmar is also involved in China's BRI through the China-Myanmar Economic Corridor (CMEC). China earmarked an investment  of $1.3 billion for the Kyaukphyu Port, starting from 2020. The total project cost was $7 billion. However, Myanmar’s National League of Democracy (NLD) regime reduced the project's scope in 2020,  due to fears of falling into a debt trap. The China International Trust and Investment Corporation Group (CITIC) leads the project, which also involves creating an industrial zone. Situated on the western coast of Rakhine state, , the Kyaukphyu Port occupies a strategic location on the Bay of Bengal. This geographical positioning follows the trajectory of the 21st-century Maritime Silk Road, a modern-day maritime route that interlinks Asia, Europe, and Africa.

China looks to expand far east with ports in Cambodia and Malacca

China has increased its presence in Cambodia through a $1.5 billion investment in the Ream Naval base. This initiative, led by state-owned Shanghai Construction Company and China Bridge and Road Company, is set to be operational by 2025. The initial project phase has a $200 million investment to establish container operation zones, commencing with a yearly capacity of 300,000 TEU (twenty-foot equivalent unit). Plans include highway connections, including one to the nearby capital, Phnom Penh. Recent reports indicate swift progress, with the pier development underway in the first half of 2023.

Adjacent to the Cambodian naval base is Malaysia's Malacca Port, a crucial link between the Indian Ocean and the South China Sea. The project was awarded in 2016 to Malaysian developer KAJ Development. Collaborating with Chinese companies like PowerChina International Group, a subsidiary of China's State Power Investment, along with Shenzhen Yantian Port Group and Rizhao Port Group, KAJ envisioned a 246-hectare project featuring economic zones, upscale housing, hotels, and diverse tourist attractions. However, the project was left incomplete after the Malacca government cancelled the agreement with KAJ Development owing to three years of inactivity in November 2020.In December 2022,  the countries made new plans for the redevelopment of the port into a new deep sea port with an investment of $7.2 billion from China. The redevelopment deal also includes a commitment of imports of $2 trillion from Malaysia over the next five years.

China continues to make new investments in African nations

We now shift our focus to the African continent, where China stands as one of the top four investors with investments reaching $3.4 billion in 2022 and another $1.3 billion by April 2023. 

Among African countries, Sudan represents one of China's earliest engagements with the continent. Sudan’s Haidob port received a Chinese investment of $141 million, and was inaugurated in December 2020. This facility is dedicated to the transportation of livestock such as cattle, camels and sheep to Asian markets. In the vicinity,  Eritrea and Djibouti have two ports with major Chinese investment - the Massawa Port and the Doraleh Multipurpose Port, respectively. Massawa Port’s project was contracted to state-owned China Harbor Engineering Company for $400 million. Doraleh, on the other hand, was financed for $405 million by China’s Exim Bank and was contracted to state-owned China Civil Engineering Construction Corp and Channel Engineering Bureau Group.

Coming to the Southern part of Africa, we  encounter Tanzania, home to the Dar Es Salaam and Bagamoyo ports. For the Dar es Salaam Port, a $154 million contract was awarded to China Harbour Engineering Company in 2017. The project involves the expansion of the primary port in the commercial hub, the construction of a roll-on, roll-off terminal, and the enhancement of the depth and resilience of seven berths within the port. On a different note, the Bagamoyo Port is a stalled $10 billion project, which is being renegotiated between the Tanzanian Government and China Merchant Port.

Mirroring Tanzania, Kenya also hosts two ports with Chinese funding - Lamu and Mombasa. The Lamu Port plays a crucial role in the expansive transportation corridor linking Lamu, South Sudan, and Ethiopia. This corridor, known as the Lamu Port South Sudan-Ethiopia Transport (LAPSSET) corridor, is valued at $23 billion. The initial phase of this project, which involves constructing 32 berths, was undertaken by the state-run China Communications Construction Company at $367 million in 2021, focusing on the first three berths. The Mombasa-Nairobi standard gauge railway received a $3.2 billion loan from China’s Exim bank. The initial auditor’s report suggested that the Mombasa port served as collateral, and any default on yearly payment of $705 million could result in a Chinese takeover, akin to the events in Sri Lanka. 

China eyes global trade with two ports in the Suez Canal

From eastern and southern Africa, we move to the ports along the Suez Canal, which is a vital route for India’s trade  with Europe. Among these, Port Said is situated in the northern part of the canal and Ain Sokhna Port occupies the southern part. China’s COSCO Shipping Ports (CSPL) has purchased a 25% stake in a new container terminal at the Ain Sokhna Port for $375 million. The company already had a 20% stake in the non-controlling container terminal at Port Said. 

In Australia, the Darwin Port was leased to China’s Landbridge group for $390 million for a period of 99 years. As Australia’s relations with China deteriorated in recent years, the Australian government decided to build a new port in Darwin for $1.5 billion. 

In conclusion, China's "String of Pearls" strategy involves strategic investments in maritime ports along the Indian Ocean, thereby reshaping regional geopolitics. Ports like Gwadar, Hambantota, and Chittagong enhance China's influence through initiatives like BRI and CPEC. The situation in Hambantota, Sri Lanka, is a warning about the risks of falling into debt traps. The impact extends to trade routes like the Suez Canal, reflecting China's global maritime ambitions. These nations are striving to strike a balance between reaping economic benefits and addressing security concerns, thereby reshaping policies in response to China's ever-expanding maritime network.

 
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The Baseline
21 Aug 2023
 
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