World’s Biggest Shipping Line Falls Amid Fears of Trade Wars

Containers are seen unloaded from the Maersk's Triple-E giant container ship Maersk Majestic, one of the world's largest container ships, at the Yangshan Deep Water Port, part of the Shanghai Free Trade Zone, in Shanghai, China, September 24, 2016. Picture taken September 24, 2016. REUTERS/Aly Song
REUTERS/Aly Song

By Christian Wienberg

(Bloomberg) — A.P. Moller-Maersk A/S, the owner of the world’s biggest container shipping line, saw its shares fall on Wednesday as the outcome of the U.S. presidential election fanned concern there will be a shift toward policies that are hostile toward global trade.

Maersk sank as much as 5.6 percent to trade 3.4 percent lower at 9,215 kroner at 11:29 a.m. in Copenhagen. The company’s Maersk Line unit commands almost 16 percent of the global market for transporting goods by sea. Executives at Maersk have already signaled alarm at the prospect of a world in which some of the biggest political powers adopt a more protectionist tone in their trade policies.

“The risk of increased protectionism may derail a recovery in global trade,” David Kerstens, an analyst at Jefferies International, said in a note on Wednesday. He listed Maersk as one of the companies “most affected” by the threat.

Investors woke up to a mass selloff across markets amid panic and confusion over what a White House led by Donald Trump will mean for trade and geopolitical stability. The Republican nominee’s victory confounded expectations built on pre-election polling.

A Trump presidency would also be bad news for the Danish economy, where Maersk is the biggest company by revenue, according to Danske Bank. About one-third of Denmark’s current account surplus is directly dependent on the U.S. and global sea trade, “so an anti-trade policy will clearly be a problem,” Las Olsen, chief economist at Danske in Copenhagen, said in a note.

Speaking to reporters in Copenhagen after the results were clear, Danish Prime Minister Lars Lokke Rasmussen said Trump’s victory puts into question the future of U.S.-European trade relations.

“It’s uncertain what the fate of TTIP will be,” Rasmussen said. He went on to underscore his nation’s reliance on well-functioning trade relations. “Denmark is a country that has generated all its wealth through trade with others.”

According to Helge Pedersen, chief economist at Nordea in Denmark, Trump’s victory may trigger a U.S. recession in connection with the trade war that could ensue from his policies.

The U.S. election outcome hits Maersk as the company struggles with a market already buffeted by overcapacity. Chief Executive Officer Soren Skou said last week he’s willing to lose money in the short term in exchange for longer-term gains in market share. The industry must consolidate in order to cope with the headwinds it faces, he said then.

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