Sterling rebounds on data surprise, Brexit hopes

The British currency had a rollercoaster week during which it plunged to three-year lows before rebounding strongly as lawmakers voted to block a no-deal Brexit. (AFP)
Updated 09 September 2019

Sterling rebounds on data surprise, Brexit hopes

  • Against the US dollar, the pound gained 0.25 percent to $1.2321 after weakening 0.2 percent to $1.2233 earlier
  • The Daily Telegraph reported British PM Boris Johnson has prepared plans to legally stop any Brexit extension

LONDON: Sterling rebounded from early lows on Monday and headed toward a five-week high on Monday as surprisingly strong data and growing optimism that Britain will not crash out of the European Union without a deal boosted demand for the British currency. British Prime Minister Boris Johnson will try for a second time on Monday to call a snap parliamentary election, but is set to be thwarted once more by opposition lawmakers who want to ensure he cannot take Britain out of the EU without a divorce agreement in place.
“The threat of a no-deal Brexit has somewhat receded but has not gone away completely, which is reflected around current levels,” said Esther Maria Reichelt, a strategist at Commerzbank.
Against the dollar, the pound gained 0.25 percent to $1.2321 after weakening 0.2 percent to $1.2233 earlier. It hit a one-month of $1.2353 last week.
Versus the euro, it also gained 0.25 percent to 89.48 pence.
Johnson last week failed to win enough support from lawmakers to call an early election and parliament also approved a bill which aims to block a no-deal Brexit at the end of October. That would force Johnson to seek a delay to Brexit.
Sterling had a rollercoaster week during which it plunged to three-year lows before rebounding strongly as lawmakers voted to block a no-deal Brexit.
In a note published late on Friday, strategists at Goldman Sachs raised the probability of a Brexit deal to 55 percent from 45 percent earlier and cut the likelihood of a “no deal” to 20 percent from 25 percent previously.
However, there is some uncertainty on whether the EU will allow an extension, while the Daily Telegraph reported Johnson has prepared plans to legally stop any Brexit extension.
The uncertainty prompted hedge funds to unwind some of their negative bets against the British currency.
Speculative short positions on the pound slipped in the latest week to 84,959, according to data from the US Commodity Futures Trading Commission.
The pound also received a rare boost from surprisingly strong economic data.
Economic output in July alone was 0.3 percent higher than in June, the Office for National Statistics said, marking the biggest rise since January and topping all forecasts in a Reuters poll of economists that had pointed to a 0.1 percent increase.


UAE-based companies turn to Bangladesh to build their ships

Updated 14 October 2019

UAE-based companies turn to Bangladesh to build their ships

  • Vessels worth $160 million were exported by the South Asian country last year

DHAKA: At present, Bangladeshi ships are being exported to around 12 countries in Asia, Africa and Europe.

“Made in Bangladesh ships have a huge potential in India, Pakistan, Saudi Arabia, the United Arab Emirates (UAE), Norway, Sweden, Denmark, Finland, Italy, Germany and some African countries. Now, our focus is to have more orders from different international buyers and Bangladesh government is also formulating the policies for this export oriented industries,” Dr. Abdullahel Bari, president of the Association of Export Oriented Shipbuilding Industries of Bangladesh (AEOSIB) told Arab News.

Bari, who is also the chairman of Ananda shipyard, said that the country has more than 100 shipyards which produce different kind of ships for the local and international markets. Of them, 12 large shipyards have the capacity to meet the demand of the international market. He said that Bangladesh will have a “golden period” in the next five years in the ship-building sector with both the government and private sector investors keen on exploring new opportunities.

“If everything goes according to the plan, our export earnings from shipbuilding will exceed the benchmark of $1 billion per year within the next five years,” Bari said.

He added that, as a Muslim nation, Bangladesh enjoys goodwill in the Middle East especially in Saudi Arabia and the UAE.

“To bag the opportunities in the Gulf countries, from now onwards, we should have more active participation in different marine fares in Saudi Arabia and UAE,” Dr. Bari said.

FASTFACTS

• At present, Bangladeshi ships are being exported to around 12 countries in Asia, Africa and Europe.

• Ananda Shipyard began exploring the European market by exporting a multi-purpose cargo vessel to the Germany.

• Bangladesh’s export earnings will exceed the benchmark of $1 billion per year within the next five years.

UAE-based shipping company Al Rashid shipping is already in talks with Bangladeshi shipbuilders to source its ships, with Western Marine Shipyard Limited (WMS) – one of the leading shipbuilders in the country – securing orders for the construction of two oil tankers worth $6.8 million. 

“With government support, shipbuilding could play an important role in export diversification. The main challenge for this sector is arranging working capital for projects. If banks and financial institutions come forward in supporting this sector, we can secure more orders from local and foreign buyers,” Saiful Islam, WMS Chairman, said. The shipbuilding company is expecting more orders from the UAE market after the successful delivery of these oil tankers.

“According to our capacity, Bangladeshi shipbuilders can only concentrate on building medium-sized vessels which is within 15,000 Dead Weight Tonnage (DWT) capacity and various utility vessels like OPV, TUGS, offshore vessels, survey vessels, inland container vessels, multi purpose cargo vessels, survey vessels, landing crafts, ro-ro ferries, passenger ships,” Captain Sohail Hasan, managing director of WMS told Arab News.

In 2017, Western Marine also exported one Landing Craft namely “Ajman Trans” to the same company making it the 43rd ship to be exported from Bangladesh.