London remains the top financing centre for the global transport industry, although it faces stiff competition from New York and capitals in Asia Pacific as companies seek to tap more funding sources, a survey showed on Friday.
Some 37 per cent of respondents from the global aviation, rail and shipping sectors ranked London as the key financial centre for transport, followed by New York at 14 percent and Singapore at 7 percent, the survey by international law firm Norton Rose found.
“London and New York remain key financial centres for the transport industry but are looking over their shoulders at Asia which is growing in importance,” said Harry Theochari, global head of transport at Norton Rose.
Of those canvassed, 43 percent from the rail industry said London was most favoured as a financing hub, followed by 40 percent in the shipping sector and 31 percent in aviation.
The annual survey by Norton Rose, now in its fourth year, is one of the transport sector’s leading barometers of market conditions, especially for the shipping community.
While London has a 300-year history as a leading finance, insurance and legal centre for the shipping industry, the survey said companies were looking at alternatives due to tough trading conditions, exemplified by a warning last month from Frontline (FRO.OL), one of the world’s biggest tanker operators.
Frontline said it may miss bond repayments due in 2015 and be forced to restructure again if the market’s depression continues.
“A dramatic reduction in the availability of debt finance in the London market means that shipping is increasingly turning to structured finance and private equity,” Theochari said.
“This gives New York a distinct advantage, as it has the largest capital markets in the world and far greater access to private equity than any other global financial centre.”
The survey canvassed views from 1,006 participants from a range of companies involved in transport including financiers, ship owners and operators, manufacturers, builders and industry advisors. Those polled comprised 383 from the aviation sector, 314 from rail and 309 from shipping. (Editing by David Holmes)