Out of all the trades, the automotive carriers (Car Carriers) are likely to be hit hardest by Brexit, says a report from Arctic Securities. The UK automotive market is the EU’s second largest, following Germany.
Till date nearly 58% of UK made vehicles were exported to the EU. Consequently, the industry predicted that the Brexit vote would result in retrenchment and a fall in investment and therefore largely voted to remain.
In light of this, the result of the vote shocked many in the industry, particularly with financial markets performing badly following the result. The industry fears that the prevailing sentiment of anti-trade will aid in slowing down growth.
On the other hand, despite a risk of slower growth in commodities, it appears that the shipping sector may remain unaffected.
“Our main take is that the key risk is an overall slowdown in growth prospects, given the potential for contagion in the EU as well as the growing ‘anti-trade’ mentality that could come out of the separation,” said Arctic Securities analyst Erik Stavseth.
“The car carrier and container segments may feel more of a pinch — particularly the car carrier industry, with the UK being both an important end-user and producer of cars,” he added.
Shipping sectors such as dry bulk, tankers and gas carriers may not be affected all that much, Mr Stavseth said, despite the risk of slower growth in commodities.
Meanwhile, ship financing may get more difficult, with UK banking shares down by about a fifth on Friday, the day the referendum results were announced, resulting in more lending from the east, Mr Stavseth said.
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Source: Lloyd’s List
