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13 December 2002
According to this article (below) by the Agence France Presse, Moody Investors Service “downgraded its outlook for Singapore port operator PSA
Corp. from stable to negative late Tuesday, Dec 3, reflecting concerns
about increased competition and the poor global trading environment”.
Singapore government-run PSA is obviously unable to compete with tougher competition from the Port of Tanjung Pelepas in neighboring Malaysia. Tanjung Pelapas recently snared two of its biggest clients over the past two years – Danish line Maersk and Taiwan’s Evergreen Marine Corp, the AFP article noted.
The article also noted how lower cargo volumes due to the global economic slowdown could also effect earnings of the PSA.
The PSA is owned by Temasek Holdings, a wholly owned and funded Singapore government company. Temasek Holdings is headed by Ms Ho Ching, the wife of DPM Lee Hsien Loong and daughter-in-law of Lee Kuan Yew. Temasek Holdings is funded by public monies from the Monetary Authority of Singapore (MAS) headed by her husband Lee Hsien Loong.
Read the AFP article below.
Moody’s downgrades outlook for PSA Corp. to negative
Agence France Presse
December 4, 2002
MOODY’s Investors Service downgraded its outlook for Singapore port
operator PSA Corp. from stable to negative late Tuesday, Dec 3,
reflecting concerns about increased competition and the poor global
However, Moody’s affirmed PSA’s “Aa1” long-term senior unsecured
foreign currency debt rating.
“The outlook change is prompted by pressure on PSA’s operating margins
due to increasing competition and a poorer operating environment,” the
credit risk evaluator said in a statement.
“Moody’s is particularly concerned with the pressure facing shipping
companies with their focus on costs as well as competition from
neighboring ports (which) will impose increasing pressure on PSA’s
“In addition, the port operations are also vulnerable to the overall
global trading environment.”
State-run PSA is facing tougher competition from the Port of Tanjung
Pelepas in neighboring Malaysia which has snared two of its biggest
clients over the past two years — Danish line Maersk and Taiwan’s
Evergreen Marine Corp.
Lower cargo volumes due to the global economic slowdown could also
But despite the growing pressures and the recent shutdown of US west
coast ports, PSA said last month it was on track to achieve its goal
of handling 17 million twenty-foot equivalent units (TEUs) at its
Singapore operations by the end of this year.
Moody’s said it decided to affirm PSA’s Aa1 rating to reflect its
belief that the Singapore firm “remains a global leader in container
transshipment services in view of its strategic location and its size
Moody’s also said it considered the rising revenue contributions of
PSA’s overseas investments when producing its ratings.
PSA said last month its total throughput rose 28 percent on the year
to 2.18 million TEUs.
Its overseas terminals handled 760,000 TEUs in October, up 122