Shipping stocks in calm waters despite Brexit plan defeat (source: Tradewinds)

UK and Europe a side-show in terms of global trade, leading analyst says.

January 16th, 2019 11:07 GMT

by Andy Pierce

Shipping stocks have so far avoided any stormy water in the wake of the latest Brexit chaos in the UK.

Crushing and humiliating were just two of the adjectives used to describe Prime Minister Theresa May’s defeat as parliament voted down her plan to exit the European Union last night.

The largest defeat for a sitting UK government on record immediately triggered a vote of no confidence and created further uncertainty around how and when Brexit will take place.

While chaos is in the air in Westminster, global stock markets and shipping equities showed little or no ill effects.

The world’s largest shipowner AP Moller-Maersk inched up a little over 1% in Copenhagen, while ferry operator DFDS, one of the beneficiaries of UK ferry contracts, was up 2.48% this morning.

Shares in London-listed shipbrokers Clarksons and Breamer Shipping Services, and shipowner James Fisher were all essentially flat with a very low volume of shares changing hands.

One leading analyst told TradeWinds the latest events had left some investors sitting on their hands waiting for further clarity, while the indication was internationally, they simply didn’t care.

“Fundamentally, the degree to which you care about Brexit is directly proportional to your distance from the UK,” he said.

“Yesterday’s vote did not tell us anything that we didn’t already know or couldn’t have been easily predicted.”

The analyst explained that while political events between China and the US were influencing shipping stocks given their’ dominance of world trade, events in the UK and Europe were a “side-show”.

“Norway is the prime example that you can have a thriving shipping industry and not be in the EU,” he added.

Shipping stocks’ resistance to the Brexit vote comes following a strong start to 2019, after the bloodbath which came at the end of last year.