Tuesday, July 24, 2018

Shipping: "Amid Trade War, Rare Hedge Fund Bet Targets the World’s Biggest..." (MAERSKB:DC; AMKAF)

From Bloomberg via gCaptain, July 23:
A.P. Moller-Maersk A/S is in an unusual place this year as the world’s biggest shipping company finds itself the target of an attack by hedge funds.
For years, there’s been no speculation against Maersk to speak of. In September, short positions represented just 0.8 percent of the Danish company’s stock. But with a trade war upending the outlook for the global container shipping industry, investors are reviewing their options.
Short interest in Maersk has jumped to about 6 percent of the share capital this year, according to data compiled by IHS Markit. That’s the highest level on record, with the data going back until 2006 (the numbers have been adjusted for the effect of dividend payments).

The global economy is now firmly in the grip of an escalating trade war. On Friday, U.S. President Donald Trump said he’s “ready to go” with new tariffs on $500 billion of Chinese goods destined for the U.S., which roughly corresponds to the value of all imports from China to America.

For a company that controls about a fifth of the world’s container fleet, which transports goods worth $4 trillion a year, the new wave of protectionism could be devastating. Maersk has already lost more than 20 percent of its market value this year as investors try to digest the changing landscape.

“There’s a lot of uncertainty over how container freight demand will develop during the remainder of the year, caused by the tariffs implemented on Chinese imports in the U.S,” David Kerstens, an analyst at Jefferies, said by phone. “Clearly there’s a risk the situation escalates and further impacts Transpacific trade flows.”...