A generally upbeat set of stories in the FT this morning:
The Bank of England’s executive director of financial stability has called for risk rules for lending to small businesses to be temporarily relaxed. Although counterintuitive in some ways, it would help to smooth business cycles: encouraging activity in a downturn and reducing the support given to small businesses in a boom.
Aircraft manufacturer Boeing has won its largest ever order for commercial aircraft: a minimum of fifty of the long range 777 planes, and possibly as many as seventy. This is a sign of confidence by the Emirates airline, which plans to use the aircraft to grow its routes pretty much everywhere: “Africa, Asia, Europe and the US.”
Charter rates for tankers able to carry liquified natural gas (LNG) have surged from $30,000/day to as much as $100,000-$120,000/day as the proportion of ships lying idle has fallen from 30 per cent to something between five and ten per cent. This is in sharp contrast to the rest of the world’s shipping industry. Demand for LNG surged in Japan after nuclear plants were closed there in March. At the same time the USA’s production of shale gas increased supply from that country, and one million ‘British Thermal Units’ of gas bought for around $4 in the US can be sold in Japan for $15.
Japan’s economy has returned to strong growth for the first time this year, and following rebuilding of supply chains after the earthquake and tsunami in March. In the July-September quarter the economy grew by an annualised equivalent of six per cent — comparable with that of China which has fallen to nine per cent. (In the final month, however, September, industrial output fell four per cent. So GDP may fall back in the final quarter.)
‘Opaque’ Chinese conglomerate HNA looks poised for a round of buying of ‘distressed’ assets, including shipping, hotels, airports, and airlines. “The international … acquisition strategy has two or three years left to run.”
UK inflation is expected to fall next year.
However, “European markets started the week on a glum note as concerns about the region’s debt crisis continued… despite the change in governments in Greece and Italy.”