The NTI newswires have been pinging like Boris Johnson's WhatsApp notifications today. There is more news than can be comfortably handled (or interestingly reported), but somehow we have to make sense of it all.
As a result we are introducing our all-new 'Knackered Rating'. If you are an insolvency professional dealing with certain business sectors, or a JIEB student keeping tabs on business-specific information, or someone's Mum wondering what on Earth young Persil is looking at online, our new Rating service will help inject both decent knowledge and a little perspective.
The Knackered Rating scores businesses from one to ten. Ten being Tesla or Apple; one being ... anyone in energy sales or distributions right now.
Talking of which - energy companies and traders: Knackered Rating 1. Energy companies and traders are calling for emergency support from governments or central banks to prevent them running out of cash. There is unprecedented volatility in commodity markets, and such businesses seem to be particularly bad at learning lessons. The European Federation of Energy Traders (which probably didn't exist until a year or so ago) say that their members are at risk of being unable to meet huge margin calls triggered by the extreme market conditions. Or, to put it another way; they are knackered. Big style.
Companies dealing in anything that involves the insertion of a chip, or circuit board or anything with a touchscreen: Knackered Rating 3. Such components are usually made in China and there has been an order for non-essential workers to stay at home in Shenzhen (due to Covid - as the Chinese authorities have "zero-tolerance on Covid" ... and ideas ... and thinking out loud ... and news ... and well, you know), the technology and manufacturing hub that is home to Yantian, one of the busiest container ports in the world. The shutdowns are expected to ripple through the supply chains of manufacturers and retailers, stoking inflation, with freight rates expected to be pushed up by the shipping delays. And when we say 'ripple', we mean, you are going to need a surfboard at this end of the chain in about a month or so.
Online fashion retailers, such as Boohoo and Asos, who make or buy most of what we suppose can be termed 'fashion' from China: Knackered Rating 3. Shares in Boohoo, which has a factory in Shenzhen (which we are sure is very nice; probably having windows and hand basins and everything), fell by 5.8 per cent on Wednesday (16 March), losing 5½p to 87½p. Asos, a rival fashion retailer with 231 factories in China, dropped 5 per cent, or 87p, to £16.63.
Anyone in the oil market: Knackered Rating 1 (and we are rounding up). This market is facing “the biggest supply crisis in decades”, because of a drop in Russian supplies that threatens to keep prices high and depress economic growth, the International Energy Agency grimly warned. Much depends upon how many weapons Boris managed to sell to the Saudis and those from the UAE on his brief visit yesterday; but even so Neil is looking VERY smug in his electric car.
The defence industry: Knackered Rating 9. Defence ministers Europe-over are looking at their hardware and scratching their heads at the moment. Does it work? Might it have to? In any event, even in Germany where they don't tend to stress about such stuff, the chacellor (whose name is not Merkel, but we are yet to learn it) has pledged to invest an extra €100 billion and to increase annual spending from 1.5 per cent to 2 per cent of GDP.
If all Nato members move above 2 per cent of GDP, it could mean 40 per cent to 50 per cent growth in procurement over five years, according to analysts. BAE Systems shares are up by a third this year and if your financial advisers didn't move your investments there when Putin got his todger out in early February, they should be shot.
The insurance industry: Knackered Rating 4. The war in Ukraine could cost insurers billions of dollars in claims, with the aviation insurance sector alone facing potentially the biggest loss event in its history due to the hundreds of planes grounded in Russia. This is one of the hardest sectors to feel sorry for and, true to form, insurers have been seeking to minmise their losses by shoring up their positions, re-insuring and doing all that other dodgy stuff that seems to work.
Talking of which; is the 'Knackered Rating' working for you? Let us know here in the NTI newsroom.
