Shipping

Danish shipping raid heralds consolidation wave

27 Apr 2021

DSV Panalpina is loading Kuwait’s Agility into its hold in return for $4.1 bln in new shares. With its flotilla of medium-sized players, the global freight sector is ripe for M&A. Disruption from the pandemic and recent Suez blockage present a window for bigger players to pounce.

Trains deal takes regulatory risk on a round trip

1 Apr 2021

Canadian Pacific can effectively close its $25 bln takeover of Kansas City Southern before watchdogs approve the deal, because of a quirk of U.S. rail regulation. Sellers’ shareholders get paid out. But the combined company shoulders regulatory risk in a more complicated way.

Capital Calls: WFH deals, Suez Canal, NorNickel

29 Mar 2021

Concise views on global finance in the Covid-19 era: Fintech firm Broadridge pays a full price for trading platform; with the waterway clear, all sides will be taking up positions for a legal battle royal; the Russian nickel producer cashes in on high copper prices.

Suez blockage comes a year too late

25 Mar 2021

The Ever Given continues to block the Egyptian canal. Barring progress, shipping firms may soon have to re-route vessels around Africa, adding seven days and extra fuel costs. A year ago, with crude prices tumbling, many did that anyway. With oil dearer, it’s a painful choice.

Corona Capital: Citigroup, WeWork

14 Aug 2020

Concise views on the pandemic’s corporate and financial fallout: Citigroup’s embarrassing $900 million bank error; and a small silver lining for WeWork’s botched IPO.

Hapag-Lloyd sails into valuation Bermuda Triangle

14 May 2020

The German shipping giant’s shares have doubled in a month, to the bemusement of all including its CEO. A tiny 3.6% free-float may be part of the puzzle. But positive reasons for the valuation hike – brightening horizons, M&A fever or short-sellers caught short – are absent.

Corona Capital: Cruise ships, China/U.S. friction

13 May 2020

Concise views on the pandemic’s corporate and financial fallout: Royal Caribbean raises and dreams of a time when cruise ships come back into favor, while a U.S. pension fund decides to give Chinese stocks a miss.

Turkish canal is bad way to fix infrastructure gap

31 Mar 2020

President Tayyip Erdogan is building a $12 bln waterway in Istanbul. The stated aim of stopping ships from crashing into the Bosphorus fails to make up for the risk of environmental catastrophe. There’s no promise of new revenues either. The only winners will be land speculators.

Oil storage crisis is new threat to OPEC

25 Mar 2020

The double whammy of a Saudi Arabia-led price war and a virus-fuelled collapse in demand points to a huge oversupply of crude this year. Space to store the surplus may run out at this rate. If that’s exhausted, a barrel of the commodity could soon be worth less than $20.

DP World U-turn has strings attached for Dubai

17 Feb 2020

The ports and logistics group is buying back a listed stake at a hefty discount. There’s a rationale for doing so, but it will push up leverage. At a time when the emirate is battling a property slowdown, it will also raise the eyebrows of investors who see it as a capital hub.

FedEx gets caught in a trade-war vise

25 Jun 2019

The $41 bln parcel carrier is suing the U.S. government over onerous rules for exports, not least to China. Meanwhile, its own errors may land it on a Beijing blacklist. FedEx can handle a profit hit, but getting embroiled in a tariff fight would put it further behind rival UPS.

Uber’s trucking is at best a very long haul

7 May 2019

The ride-hailing app’s freight unit, 3 pct of revenue in 2018, is a growth focus as it prepares its IPO. Connecting shippers to carriers has potential but there’s a driver shortage. Uber already offered incentives. As elsewhere at the firm, the costs of expansion could spiral.

Swiss $4 bln freight battle has questionable cargo

16 Jan 2019

Activist investor Cevian has helped solicit a bid for subscale freight group Panalpina. Would-be owner DSV could face competition from Switzerland’s Kuehne + Nagel, handing shareholders a sweeter price. It’s less clear that either will make a return from a much higher offer.

Germany may outdo Italy as a bank bail-in wrecker

9 Jan 2019

NordLB needs at least 1.2 billion euros to help provision dud loans after merger talks with rivals failed. Along with smaller Italian peer Carige, the regional German lender is a prime candidate for resolution. Politics means a mix of private equity and public funds is a likelier solution.

Gig economy throws wrench into China labour policy

28 Aug 2018

App-based jobs are becoming controversial in the People's Republic, too. Factory strikes may be waning, but reports of worker protests involving startups like Meituan and Didi are rising. That's leaving Beijing stuck between two priorities: social stability and tech innovation.

Wilbur Ross proves bad behavior is new norm

20 Jun 2018

Lawmakers hammered the U.S. commerce secretary about the effect of tariffs – but barely mentioned his sale of a company’s shares days ahead of a negative news story. Congress, occupied with trade battles, is growing numb to shady conduct. Calling it out, though, matters.

Brazil’s truckers drive toward a fiscal hole

29 May 2018

Protesters demanding lower fuel prices have won concessions from the Temer government. But the specter of revived subsidies and state meddling in oil giant Petrobras hit investor confidence and the real currency, part of the truckers’ problem. Fiscal laxity is not a solution.

Indispensable execs demand higher disclosure

18 Dec 2017

CSX’s turnaround expert Hunter Harrison is dead months after joining the railroad. A rich signing package and $10 bln added to the firm’s market worth showed his importance. If companies and markets think and act as if leaders are irreplaceable, key-man risks must be disclosed.

CSX chief’s illness puts its recovery on crutches

15 Dec 2017

The railroad hired 73-year-old Hunter Harrison in a revival effort earlier this year. Less than a year into his four-year contract, he’s on medical leave. Valuations and big pay packages pinned on aging executives call for an actuarial discount.

Italy gets narrow lead in race for EU naval giant

28 Sep 2017

Shipbuilder Fincantieri has won conditional control over French rival STX, which Paris nationalised suddenly in July. The pact defuses a cross-border diplomatic row. But the real battle will be fought over the ownership of a European naval champion that is now in the making.