For the last decade the container shipping sector has been struggling through a slump in the global economy, as well as persistent overcapacity concerns. These challenges have caused profits to fall and industry leaders, like Hanjin Shipping, to collapse. Moreover, the weight of increased competition and ridiculously low freight rates has resulted in acquisitions, mergers, and partnerships between the leading container lines. This cooperative approach has been the industry’s savior and much of the reason the maritime shipping sector will experience favorable growth in the coming years.
With the “thinning out of the pack” and the subsequent drop in competition – resulting from the new alliances, the remaining container shipping lines have been able to reverse their previous losses and emerge profitable early in 2017. For many, the additional profits have been used to fund investment in shipping containers, buy new ships, and improve efficiency. The new additions, like reefer containers and 20,000 TEU vessels, are expected to improve the operational performance of their fleet and meet the expanding needs of their clients. Regardless of their motive for the investment, the move will ensure they can meet the demands and pressures of an expanding global economy.
Despite the struggles and obstacles they have experienced over the last (nearly) ten years, bigger profits are certainly on the horizon for container shippers. With further investment into ports, terminals, and infrastructure, operational savings will continue.to work in partnership with higher freight rates to ensure continued growth. This will translate into a stronger, more sustainable global economy.
The newfound prosperity in the container shipping industry has also opened doors for investors. Although it is not likely private investors will purchase a container ship, they do have the opportunity to invest in containers. With the help of a container leasing company, the investment community can purchase their own fleet of containers and lease them to manufacturing, shipping, and logistics companies. This allows investment-seekers to profit from the sector’s renewed vigor and strong growth.
When we look at the countries with the strongest growth in the world, much of our attention is drawn to Asia. Within the continent, investors will find a few regions that are experiencing significant growth and prosperity. Among these are a group of emerging markets that include China and India, as well as the United Arab Emirates.
Regardless of their status as an emerging market, these countries/regions are performing better than most of the world’s “economic leaders,” and in doing so, are making big contributions to global growth. Without their economic performance since the Global Financial Crisis, the world would not have experienced such a smooth road to recovery.
The Chinese economy, the world’s second-largest behind the United States of America, grew 6.9 percent in the first quarter of 2017. In a remarkable sign of strength and stability, China has recorded five consecutive quarters of growth of either 6.7 percent or 6.8 percent. In February 2017, China unexpectedly posted its first trade gap in three years. This upbeat import reading reinforced the growing view among analysts that economic activity in China has picked up in the first two months of 2017.
According to the Central Statistics Organisation (CSO) and International Monetary Fund (IMF), India has emerged as the fastest growing major economy in the world. Despite the uncertainties in the global market, the Economic Survey 2015-2016 has forecast that the Indian economy will grow by more than seven percent for the third successive year in 2016-2017, and is likely to begin growing at eight percent or more in next two years.
United Arab Emirates
MEED’s annual UAE Outlook Report the UAE will see real GDP growth rise to between four and five percent a year, from 2017- 2020. This is compared with approximately three percent growth in 2016. The UAE’ economy is well-diversified and supports large and experienced corporations active in regional and global markets. Moreover, the banking system is solvent, liquid, and well-managed.
For investors looking for a break from the uncertainty and volatility of Brexit predictions in Europe and Trump forecasts in the U.S., Asia’s economic leaders continue to offer a more appealing investment environment. Their leading industries, like container shipping and manufacturing, continue to demonstrate growth and are fueling prosperity on the continent, and around the world.
Morningstar’s report says that advisers, financial institutions and investors said their interest in alternative investments is rising, primarily to diversify.
Alternative investments first began to really rise in popularity, and quickly enter the mainstream investment community shortly after the markets crashed in 2008-2009. To this day, they remain a popular choice for many financial advisers, investment institutions and private investors.
According to research conducted by Morningstar Inc., investors have been increasing their holdings in alternative investments; with investment figures reaching approximately $19.7 billion in 2012. The survey received responses from 235 institutions and 471 financial advisers in March 2013.
In addition to the steady rise in interest, the survey conducted by Morningstar also found that both advisers and financial institutions said they look to alternative assets primarily for diversification, in addition to low correlation and enhanced risk-adjusted returns. To add to this, 63 percent of advisers said they allocated somewhere between 6 percent and 20 percent of their clients’ portfolio investments to alternative investment offerings. 15 percent of advisers reported that they anticipated allocating more than 20 percent to alternative investments over the next five years.
Interestingly, both advisers and institutions said high fees were the top reason the would hesitate about investing in alternatives, followed by liquidity and transparency concerns. Thirty percent of advisers cited uncertain benefits as another cause for their apprehension, and 22 percent cited a lack of clarity on how alternatives fit into their investment portfolio.
The findings of this survey suggests that alternative assets is where investors should consider looking, particularly when considering their return on investment (ROI), and planning their long-term investment success.
Since the market is offering poor results on traditional investments such as stocks, bonds, real estate, etc, advisers are suggesting that clients should review investment alternatives, if they hope to receive a dependable investment return. Lastly, it seems that this trend will continue over the foreseeable future, and alternative assets are set to become a hot trend within the market.