A.P. Moeller-Maersk A/S may struggle to make a profit this year after the U.S. and China descended into a trade war that promises to hurt the world’s biggest shipping company.
Maersk, which is based in Copenhagen, has already lost almost a third of its market value this year as investors gird for more bad news. Trade protectionism means less demand, and history suggests the shipping industry will struggle to make the necessary supply cuts. What’s more, Maersk is now more exposed to shipping as the former conglomerate divests its energy business.
Per Hansen, an investment economist at Nordnet in Copenhagen, says Maersk is currently “in the eye of the hurricane” when it comes to the damage that will be inflicted by a trade war. He estimates the company’s shares could drop at least 10 percent.
Maersk is already bracing itself for lackluster demand in the second half of the year, due to what it says are seasonal effects. The company said earlier in the week it will need to temporarily scale back its service between Asia and North Europe as a result....MOREIt's obviously more than just 'trade war'.
As an analyst friend used to say: "A trend is emerging".