Datastream

Suez Canal: Critical Waterway Comes to a Halt

Published

4 weeks ago

March 25, 2021

Marcus Lu

Suez canal map

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The Briefing

The Suez Canal is one of the world’s most important waterways, connecting Asia and Europe
On March 23, 2021, the Ever Given container ship ran aground, blocking transit in both directions

The Suez Canal: A Critical Waterway Comes to a Halt

On March 23, 2021, a massive ship named Ever Given became lodged in the Suez Canal, completely blocking traffic in both directions. According to the Suez Canal Authority, the 1,312 foot long (400 m) container ship ran aground during a sandstorm that caused low visibility, impacting the ship’s navigation. The vessel is owned by Taiwanese shipping firm, Evergreen Marine.

With over 200 vessels halted on either side of the canal, authorities are scrambling to dislodge the container ship and resume normal operations. This has proven to be a difficult task so far, and experts are warning that the process could take weeks.

What is the Suez Canal?

Constructed in 1869, the Suez Canal is an Egyptian sea-level waterway that provides a vital shipping route between Europe and Asia. Without this route, ships would need to sail around Africa, adding an entire week to their trips.

The connecting link between two important regional economies, the canal facilitates a significant amount of trade. The Suez Canal Authority (SCA) reported that 19,000 vessels—averaging to 52 a day—had sailed through its waters in 2020.

Year	Number of Vessels	Amount of Cargo (Tons)
2011	17,800	692M
2012	17,224	740M
2013	16,596	754M
2014	17,148	822M
2015	17,483	823M
2016	16,833	819M
2017	17,550	909M
2018	18,174	983M
2019	18,880	1,031M
2020	18,829	1,170M

The total volume of cargo being transported through the canal has increased steadily in recent years. This includes consumer goods, dry-bulk cargo such as grain and minerals, and oil products.

Implications of the Blockage

The blockage of such an important shipping route is bound to have consequences. According to Lloyd’s List, each day the Suez Canal is closed disrupts over $9 billion worth of goods trade.

European officials have also voiced concern about longer-term impacts, particularly after the blockage is cleared. A sudden influx of ships could cause massive congestion at European ports and further disrupt supply chains.

»Want to learn more? Check out this infographic on global shipping container traffic.

Where does this data come from?

Source: Suez Canal Authority, Vesselfinder.com, BBC, CNN, Lloyds List

Related Topics:logistics shipping europe trade asia Suez Canal container ship vessels egypt

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Datastream

Here’s What $1,000 Invested in Vaccine Stocks Would Be Worth Now

Ever wonder what you would have gotten if you invested $1,000 into the different vaccine stocks at the start of the pandemic?

Published

2 days ago

April 18, 2021

Aran Ali

Vaccine stocks performance during the pandemic

The Briefing

Three of seven COVID-19 vaccine stocks have outperformed the S&P 500 since the beginning of the global pandemic
Novavax is the highest performing vaccine stock, returning 1,549% to shareholders

Vaccine Stocks During a Pandemic

It’s often said that with every crisis comes great opportunity.

While such catastrophes do create upheaval and uncertainty in financial markets, they can also lead to new opportunities for investors, as asset classes react to different environments.

Since the World Health Organization (WHO) declared COVID-19 to be a pandemic on March 11, 2020, the performance of vaccine stocks have been varied—but with some notable winners that notched triple or quadruple digit returns.

Here’s how much a $1,000 investment would be worth as of March 31, 2021, if you had put money into each vaccine stock at the start of the pandemic:

Stock	Value of Investment	% Growth	Market Cap ($B)
Novavax	$16,491	1,549.1%	$14.3
Moderna	$5,019	401.9%	$59.9
BioNTech	$3,247	224.7%	$31.3
Johnson & Johnson	$1,252	25.2%	$419.8
Pfizer	$1,122	12.2%	$207.2
AstraZeneca	$1,121	12.1%	$93.8
Sanofi	$1,096	9.6%	$105.2

The Business of Vaccines

The returns on vaccine stocks have varied greatly. They are staggering in the case of Novavax and Moderna, but also seem quite underwhelming, when considering the likes of Sanofi, AstraZeneca, and Pfizer.

One factor for the discrepancy in stock price performance is the revenue potential from vaccine sales relative to the rest of the existing business, as vaccine sales will have a much greater impact on the fundamentals of smaller companies.

For example, before the pandemic, Novavax had revenues of just $18.7 million—this meant that capturing any portion of global vaccine sales would create massive value for shareholders. On the flipside, vaccine sales are much less likely to impact the fundamentals of Sanofi’s business, since the company already is generating $40.5 billion in revenue.

To put it into perspective, analysts are expecting total sales from COVID-19 vaccines to be around $100 billion, with $40 billion in post-tax profits.

Vaccine Stocks vs the S&P 500

Even in a booming and valuable industry, it’s difficult to identify the long-term leaders. For example, in the mobile phone market, there was a time where the likes of Motorola, Nokia, and Blackberry appeared untouchable, but eventually lost out.

Similarly, with the limited information available at the start of the pandemic, few, if any, could have separated the winners and losers from this group with accuracy.

In the past year, the S&P 500 grew 44.9%—meaning that only three of the seven vaccine stocks have seen their share prices outperform the market.

Nobody said helping solve a global pandemic guarantees a pay off.

Where does this data come from?

Source: S&P Global Market Intelligence
Notes: Investment growth is calculated between March 11, 2020-March 31, 2021. All market capitalization values are as of March 31, 2021.

Datastream

Bitcoin is the Fastest Asset to Reach a $1 Trillion Market Cap

Bitcoin is now part of a select very few assets that hold a market cap greater than $1 trillion. How long did it take to get there?

Published

1 week ago

April 12, 2021

Aran Ali

The Briefing

Bitcoin (BTC) hit a $1 trillion market cap in just 12 years, making it the fastest asset to do so
Investor sentiment towards BTC appears to be at extreme bullishness, with the asset adding roughly $500 billion in market cap just in 2021

Bitcoin is the Fastest Asset to Reach $1 Trillion

The world is moving forward at an accelerated pace. Historically, it’s taken multiple decades for companies to be worth $1 trillion. For bitcoin, it took just 12 short years to reach such a milestone.

To help put things into perspective, here’s a look at how long it took America’s biggest tech companies to reach the $1 trillion market cap.

Asset	Time To Reach $1 Trillion	Current Market Cap
Microsoft	44 years	$1.9 trillion
Apple	42 years	$2.2 trillion
Amazon	24 years	$1.7 trillion
Google	21 years	$1.5 trillion
Bitcoin	12 years	$1.1 trillion

Market caps as of April 12, 2021

Extreme Bullish Sentiment

Bitcoin has been subject to widespread commotion in markets.

At the start of 2021, the cryptocurrency had a more modest market cap of $500 billion, but has gained more than another $500 billion since. An onslaught of headlines has contributed to extremely bullish investor sentiment, including:

1. CEOs begin to show interest
Elon Musk and Jack Dorsey have made sizable investments in bitcoin through Tesla and Square, respectively. It’s estimated the gain from Tesla’s $1.5 billion bitcoin investment was greater than the profits from the entirety of their business in 2020.

2. New ETFs on the block
Multiple Bitcoin ETFs focused were recently approved by Canadian regulators and some have already launched on the Toronto Stock Exchange (TSX). For many years, the Grayscale Bitcoin Trust (GBTC) was the only readily accessible investment vehicle trading on equity markets that had exposure to BTC.

3. Financial institutions finally joining in?
Mastercard, Visa, and Bank of New York Mellon have made announcements to make it easier for customers to use cryptocurrencies.

On to the Next Trillion?

Future projections for the price of bitcoin are garnering more extreme and widening price targets.

The accelerated rate of change today has many of the Big Tech companies already inching closer to the next trillion in value. Will bitcoin follow suit?

Where does this data come from?

Source: coinmarketcap.com
Notes: Financial data is as of April 12, 2021