UK stock market at record high; Swim or sink for Asia shipping lines; Hint of Zuckerberg’s political ambitions

1 UK stock market at record high (San Francisco Chronicle) Britain’s main stock index hit a record closing high Tuesday as a survey showed manufacturers gaining business from the slide in the value of the pound since the country’s decision in June to leave the European Union.

The FTSE 100 index ended the day 0.5 percent higher at 7,177.89, slightly down on its earlier all-time high of 7,205.21.

One of the main reasons why the FTSE 100 has rallied in recent months relates to the near 20 percent fall in the value of the pound across an array of currencies since June’s “Brexit” decision. On the eve of the vote, the pound was trading as high as $1.50. Now it’s around $1.23.

A weaker pound can help exporters win business abroad and paradoxically boosts the earnings of many companies listed on the FTSE 100 that make the bulk of their revenue in other currencies. They include oil giants BP and Shell, mining firms Anglo American and BHP Billiton, and Europe’s largest bank, HSBC.

The British economy has fared better since the Brexit vote than many forecasters had predicted. Instead of falling into recession as many had expected, it continued to grow. That was again largely due to the export-boosting fall in the pound as well as further stimulus measures from the Bank of England, including a cut in its main interest rate to a record low of 0.25 percent.

Though manufacturing is improving, the consensus is that the British economy as a whole will falter this year as the uncertainty surrounding Brexit ratchets up. Prime Minister Theresa May has indicated that she will trigger the two-year process by which Britain leaves the EU by the end of March. That move is expected to undermine British economic activity as businesses and individuals delay or scrap investment and spending amid the uncertainty.

http://www.sfgate.com/news/world/article/UK-stock-market-hits-record-as-manufacturers-win-10831798.php

2 Swim or sink for Asia shipping lines (Straits Times) Faced with a prolonged trade slowdown and depressed freight rates, Asia’s container lines are set for further consolidation after a year that’s seen the collapse of South Korea’s Hanjin Shipping Co, a mega merger among Japanese rivals and the sale of Singapore’s shipping flagship.

With capacity in excess, firms will continue joining forces to cut costs and improve efficiency, according to the heads of AP Moller-Maersk and Hyundai Merchant Marine Co. “It will be another difficult year,” Hyundai Merchant chief executive officer Yoo Chang-keun said. “Global shipping companies are preparing for the long battle in the shipping industry through M&As and government support.”

An overly optimistic outlook of trade recovery following the 2008-2009 global financial crisis prompted shipping companies to order ever-larger vessels, with some stretching longer than the Eiffel Tower. As capacity piled up, the companies tried to under-bid each other on freight rates to lure clients, causing levies to drop to unprofitable levels and sinking the global container-shipping industry into losses.

CMA CGM, the world’s third-largest container-shipping company, bought Singapore’s Neptune Orient Lines in early 2016. China merged its two shipping groups – China Ocean Shipping Group and China Shipping Group – in late 2015, forming China Cosco Shipping Corp, Asia’s biggest container line.

Hanjin, once the world’s seventh-biggest container-shipping company, sought court receivership last year after creditors ended all funding support and the government decided not to intervene. Korean rival Hyundai Merchant was taken over by lender-banks as part of a creditor-led restructuring.

Global shipping lines are projected to report a loss of $5.2 billion in earnings before interest and taxes in 2016, the worst since 2011, according to Drewry Financial Research Services Inc. The International Monetary Fund estimates that world trade will climb 3.8 per cent in 2017 after expanding last year at the slowest pace since the global financial crisis.

http://www.straitstimes.com/business/companies-markets/its-swim-or-sink-for-asias-shipping-lines-in-2017

3 Hint of Zuckerberg’s political ambitions (Olivia Solon in The Guardian) Mark Zuckerberg has given more weight to the idea that he could move into politics with the announcement of a statesmanly personal challenge for 2017.

In previous years the Facebook CEO has learned Mandarin, pledged to run at least a mile each day and built a virtual assistant called Jarvis to control his home. This year he wants to have visited and met people in every state in the US. He’s already visited about 20 states, which means he has to travel to about 30 states by the end of the year.

“For decades, technology and globalization have made us more productive and connected. This has created many benefits, but for a lot of people it has also made life more challenging. This has contributed to a greater sense of division than I have felt in my lifetime. We need to find a way to change the game so it works for everyone.”

He said that his journey around the country would involve road trips with his wife Priscilla Chan, visits to Facebook offices, meetings with teachers and scientists, and stops in small towns and universities. “I’m looking forward to this challenge and I hope to see you out there!” he told the Facebook community, which now has 1.79 billion members.

It’s the latest in a string of moves that indicate Zuckerberg’s intention to pursue government service. In early December, unsealed court filings from a class-action lawsuit filed in April revealed that Zuckerberg and two board members had discussed how the CEO might pursue a political career while retaining control of Facebook.

https://www.theguardian.com/technology/2017/jan/03/mark-zuckerberg-facebook-2017-resolution-visit-us-states

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About joesnewspicks

This blog captures interesting news items from around the world for those strained by information overload and yet need to stay updated on global events of significance. The news items displayed are not in order of merit. (The blog takes a weekly off — normally on Sundays — and does not appear when I am on vacation or busy.) I am a journalist for nearly three decades.
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