MarketLine Blog

Posts written in June 2017

Nicaraguan Canal project loses momentum: Expansions to Panama and Suez Canal reduce need for a second canal in Central America

MarketLine

The idea behind the Nicaraguan Canal dates back centuries, but has always been beaten back by the Panama Canal, initially by the latter’s construction, and secondly by its expansion, which has made the construction of the Nicaraguan Canal less desirable. Whilst the Nicaraguan government has declared the importance of the construction of the canal for the nation’s economy the Hong Kong Nicaragua Canal Development Group (HKND), which is in charge of the construction of the canal, has yet to initiate this construction five years after the project’s announcement. A number… Read more

HMS Queen Elizabeth: Britain’s largest ever warship launches, but it has some concerning flaws

MarketLine

The Royal Navy’s largest ever commissioned ship is launched ready for sea trials in June 2017. The Queen Elizabeth Aircraft carrier is over three times larger than the class it replaces the invincible class and has absorbed £6bn ($7.6bn) worth of investment and has taken around 10 years to come to fruition. There are a number of questions that surround the project however and in particular the military procurement process in the UK in general. There are concerns that there will not be enough crew ready to operate her, the… Read more

Car Loan Debt: Consumer debt getting out of control and risky betting on subprime loans

MarketLine

There are worries of a financial bubble forming in the car finance industry. Both in the UK and USA there has been a growing prevalence for dealers and manufacturers to offer PCP finance deals and this has led to a culture of consumers viewing vehicle ownership as direct debit agreements. This has rapidly increased new car registrations and thereby the amount of consumer credit and house debt that buyers are taking on because the amount of new vehicle sales that are funded by finance options is above 80%. Worryingly many… Read more

Aldi and Lidl US Expansion: US grocery retailers should be worried

MarketLine

Aldi and Lidl have been responsible for a huge shift in the grocery market across Europe. This has been particularly evident in the UK with the discounters growing their collective share of the market from 2.8% in 2000 to 12% in mid-2017. In a market that was previously dominated by four big retailers, this has been an impressive growth. The low prices offered by Aldi and Lidl, along with clever marketing campaigns and a growing reputation for quality produce, have enabled the discounters to erode the market share of the… Read more

Snapchat: Popularity germinates, safety concerns arise

MarketLine

Snapchat, the billion dollar social media company has grown substantially in value terms and very quickly over the past five years. With an increasing amount of new developments, Snap Inc. has somewhat introduced a new development which could revolutionize users’ experience with the smartphone’s interference with regards to day to day activities. Snap Map reveals a user’s location in real time to his/her friends or public in a design friendly interface which could mean friends can track exactly where their friends are at any point of time. With some positive… Read more

The global airlines industry will see accelerated growth by 2021, says MarketLine

MarketLine

The global airlines industry is set to rise from $569.5 billion in 2016 to $828.3 billion by 2021, representing a compound annual growth rate (CAGR) of 7.8%, and surpassing the peak growth rate of 7.4% seen in the period between 2012 and 2016, according to research firm MarketLine. The company’s latest report states that the emerging dynamic of the Asia-Pacific region, which accounts for 33.9% of the global industry, combined with signs of reduced rivalry in the European airline industry, are driving accelerated growth in global terms. The Chinese and… Read more

‘Energiewende’ boosts German renewable sector but change in policy leads to growth deceleration

MarketLine

Germany has set some of the most ambitious green energy targets for itself, not only in Europe but also the world. This decision has come about due to strong public opinion in favor of green energy in the country, especially as an increasing percentage of the population becomes aware of the negative consequences of global warming on the planet. Liberal feed-tariff rates have subsequently pushed Germany to become one of the largest producers of renewable energy in the world, with the country ranking third globally with regards to total cumulative… Read more

BoE interest rates: It is time for a raise

MarketLine

On June 15, the Monetary Policy Committee of the Bank of England decided once again to keep interest rates at the record low of 0.25%. However, the big news is that the unexpected 5-3 vote on that decision signals a change of a monetary policy, amid rising inflation that threatens households’ real income. This was no surprise as inflation in the UK economy reached 2.9% in May, keeping up its accelerated trend. In fact, this rate has surpassed the target rate of 2% set by the BoE, quicker than expected…. Read more

Behind the Digital Iron Curtain: Rise of Chinese Silicon Valley

MarketLine

After a long period of rapid, double digit growth, the Chinese economy entered a more sustainable phase of development, based on innovation and consumption. Given the large population of 1.3 billion in China, the explosive growth of smartphone users, e-commerce, and online content consumption and creation led to a digital revolution in almost all industries and business sectors. While the Chinese Communist Party is trying to match its social control in the real world with the virtual world, which becomes more and more restrictive, the country’s internet is thriving and… Read more

China’s OBOR project: Threatening the Singaporean transportation sector

MarketLine

Singapore’s location at the southern tip of the Strait of Malacca has allowed the country to position itself as one of the world’s major transportation hubs. Through this Strait travels practically all trade between the Indian and Pacific Oceans, and therefore trade going in and out of countries such as Japan and China will more likely than not pass through Singapore, especially if headed towards Europe, the Middle East and Africa. To emphasize its importance, almost half of all Chinese oil imports pass through Singapore, and the figure is even… Read more

Sanctions against Qatar: The huge costs for a large exporter that also spread to the global economy

MarketLine

The ban of transportation of goods and citizens’ movements from and to Qatar, implemented by the most powerful Middle-Eastern countries (Saudi Arabia, UAE, Bahrain and Egypt) was a huge diplomatic shock that entails a series of economic effects. Indeed, it seems that politics are a force of impact for a small geographical country that is heavily engaged in global trade. Qatar, one of the richest countries in the world, with large trade surpluses based on gas and oil exports, will have to sustain the consequences of that dependence. Taking into… Read more

UK General Election: Night of upsets points to an enormously difficult period to come for the UK

MarketLine

A fairly staggering set of results in June 2017 showed that in the UK, the political climate is changing. Almost every poll done in the run up to the election suggested a landslide victory for the incumbent government and the result was that the Conservative Party dropped its majority and only a deal with the DUP would provide them with a minority government. The implications of this result are wide ranging. It looks increasingly likely that there will be a second general election within six months as confidence in Theresa… Read more

Minority Conservative government: Hung parliament will provide a better deal for business

MarketLine

The declaration of a hung parliament but with a Conservative party government is good news for the economy and businesses because the likelihood of a ‘hard Brexit’ has suddenly been reduced because in order to survive, the government will require support from opposition groups. Given the opposition parties are all but wholly united on a ‘soft Brexit’, the policy of the previous government could be about to change radically. The change makes the possibility of the UK buying access to the single market and passporting much greater than has been… Read more

Donald Trump: The Anti-Globalism Billionaire

MarketLine

Since revealing plans to run for President, billionaire businessman Donald Trump has expressed surprising anti-globalist sentiments. For a man who’s made his fortune running luxury resorts across the globe, it is initially surprising that he would claim to oppose trade blocs, a major driver of globalization and free trade. But perhaps Donald Trump is taking his new job seriously. The ex-businessman is now the most powerful person on the planet and that comes with certain responsibilities. The US people voted for a populist, radical alternative to the established political system… Read more