Intl. Container Terminal Services (ICT) opened Phase 1 of its Basra port in Iraq. It has a capacity of 300,000 20-Foot Equivalent Units (TEUs), and when fully-developed will have a capacity of 900,000 TEUs. Phase 1 is equivalent to 4% of our 2016F TEU forecast for ICT. As mentioned before, the global economic slowdown has weakened global trade, and this, along with unfavorable movements of the EURO and Brazilian real, have reduced ICT’s earnings. ICT can only expand to partially offset the effects of these. The positive thing about ICT’s continued expansion is that when the world economy recovers, ICT’s earnings are seen to surge given that it has positioned itself globally with more and more ports. It is moving its pawns for an eventual strike just like in chess. Locally, ICT is improving container traffic with its container yard projects. ICT is doing the right things while being pounded by weak trade. It is a stock worth revisiting when the tide shifts.
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