What’s behind CapitaLand’s Economic Moat
CapitaLand Commercial Trust (CCT SP) is a Singapore based real estate investment trust (REIT) that owns 10 office properties in the city’s central business district (CBD).
Telefonica SA (TEF SM) is headquartered in Spain and is one of the world’s largest telephone operators reaching more than 350 million customers.
United Parcel Services (UPS US) earns a “wide economic moat” rating from Morningstar from efficient scale, cost advantage, and the network effect.
To demonstrate the power of efficient scale in creating economic moats, we highlight four companies: U.S.-based wide moats CSX Corporation and UPS, and international narrow moats Telefonica SA (Spain) and CapitaLand Commercial (Singapore).
Across the five moat sources (network effect, intangible assets, cost advantage, switching costs, and efficient scale), efficient scale is the most likely to drive a “narrow moat” rating from Morningstar.
Virtually every company dreams of a market with few competitors. An environment with only a handful of business rivals can become one where efficient scale is possible.
“How Moats Translate into Sustainable Competitive Advantages” is a five-part moat investing education series that explores the primary sources of economic moats.
In 2017, global economic growth has been gradually improving.
The September non-farm payroll report indicated a fall in the US labor market (SPY) (VFINX) compared to August 2017.
The ADP National Employment Report for September 2017 showed some weaker improvement in private sector employment to 135,000 in September compared to the market’s expectation of 125,000.
According to the report provided by Markit Economics, Japan’s services PMI (EWJ) (DXJ) stood at 51.0 in September 2017 compared to 51.6 in August 2017.
The final UK services PMI (purchasing managers’ index) stood at 53.6 in September 2017 compared to 53.2 in August 2017.
The final Eurozone services PMI (purchasing managers’ index) rose strongly in September 2017. It stood at 55.8 in September 2017, up from 54.7 in August 2017.
According to a report by Markit Economics, the final Spain services PMI stood at 56.7 in September 2017 compared to 56.0 in August.
The iShares MSCI France ETF (EWQ), which tracks France’s performance, rose 4% in September 2017.
The iShares MSCI Germany Small-Cap ETF (EWGS), which tracks the performance of small-cap stocks in Germany, rose 3.5% in September.
The US services PMI stood at 55.3 in September compared to 56.0 in August 2017. It beat the preliminary market expectations of 55.1.
In this series, we’ll take a look at the final services PMI for the world’s major developed nations and regions, including the United States, Germany, the Eurozone, Japan, and the UK for September 2017.
There are several important economic indicators coming up next week, including the following.
The United Kingdom’s manufacturing PMI stood at 55.9 in September 2017, compared to 56.9 in the previous month. The PMI figure was below the preliminary market expectation of 56.4.