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London (CNN Business)The quarter-mile-long container ship that’s been blocking the Suez Canal for nearly a week has been partially re-floated, raising hopes that hundreds of waiting vessels could soon transit the vital trade artery.
Egyptian officials struck an optimistic note, saying that crews plan to completely re-float the vessel later Monday. Work is expected to resume during high tide, starting around 6:00 a.m. ET.But not so fast. The bow of the Ever Given is still stuck “rock solid” and freeing the ship’s stern was “the easiest part” of the re-floating mission, according to the CEO of a salvage company working to free the ship.
“We have seen many celebratory messages over the past week, but I will stick to the facts,” Peter Berdowski told Dutch radio on Monday. “The facts are that it has indeed rotated. But the bow is still strongly stuck in the clay.”
Global shipping was in chaos even before the Suez blockage. Shortages and higher prices loomEven before the Ever Given ran aground, supply chains were stretched to the limits, making it much more expensive to move goods around the world and causing shortages of everything from exercise bikes to cheese.Read MoreThere are now 367 vessels — including 35 crude oil tankers and 96 container ships — waiting to use the canal. When traffic starts moving again, it will take days to clear the backlog, further delaying goods on their way to customers.IKEA told CNN Business last week that the blockage could “create constraints on our supply chain,” depending on how long it takes to free the Ever Given.”We can confirm that there are containers with IKEA products on vessels that are waiting to make passage and resume course towards destinations via the Suez Canal,” a company spokesperson told CNN Business.”We will consider all supply options available to secure the availability of our products,” the spokesperson added.
This picture taken on March 29, 2021 from a nearby tugboat shows the Ever Given as it began to move. Maersk, the world’s largest container shipping company, has three vessels stuck in the canal and another 29 waiting to enter. More are expected to arrive later on Monday.The company said it had received “reports of good progress” at the canal overnight, but it has already redirected 15 vessels around the Cape of Good Hope at the southern tip of Africa, adding days and cost to their trips.Maersk said that it could take six or more days to clear the backlog of ships at the canal after the Ever Given is freed, depending on safety and other factors. And the knock-on effects for business will last much longer.”Even when the canal gets reopened, the ripple effects on global capacity and equipment are significant and the blockage has already triggered a series of further disruptions and backlogs in global shipping that could take weeks, possibly months, to unravel,” the company said.
Hedge fund failure slams Credit Suisse and Nomura
Major global banks could be hit with billions of dollars in losses after a US investment firm was forced to dump shares last week, reports my CNN Business colleague Jill Disis.Nomura and Credit Suisse (CS) said Monday that earnings might take “significant” hits after a client of their broking services defaulted on margin calls last week, roiling Wall Street. Shares in both banks plunged on Monday, wiping billions of dollars off their market capitalization.If a client can’t put up cash to meet a margin call on its account, the broker can dump shares the client holds instead. That appears to be what happened last week.Neither bank identified the client that defaulted on the margin calls but Bloomberg and other media outlets said Archegos Capital was at the center of the storm. Archegos could not be reached for comment on Monday and its website could not be accessed.According to Bloomberg, which cited anonymous sources, ViacomCBS (VIACA) and Discovery were among the companies hit by the forced liquidation: Shares of each plunged more than 27% on Friday.Credit Suisse said in a statement that a “significant US-based hedge fund” failed to meet its margin commitments. It said the default affected “certain other banks” as well, though did not name them.”Following the failure of the fund to meet these margin commitments, Credit Suisse and a number of other banks are in the process of exiting these positions,” Credit Suisse said.”While at this time it is premature to quantify the exact size of the loss resulting from this exit, it could be highly significant and material to our first quarter results,” the bank added.Nomura said its losses could be as much as $2 billion, attributing the hit to “transactions with a US client.” Asked for further detail, the company declined to comment to CNN Business.”Nomura is currently evaluating the extent of the possible loss and the impact it could have on its consolidated financial results,” the company said in a statement.Nomura’s shares plunged more than 16% in Tokyo, the stock’s worst day in at least 20 years. The move wiped more than $3 billion off its market value. Credit Suisse shares fell by about 9% in early trading, also wiping about $3 billion off its market cap.
What happened when Amazon and Netflix came to India
Netflix (NFLX) and Amazon (AMZN) gave daring Indian filmmakers hope. Now that’s turning to fear, my CNN Business colleague Diksha Madhok reports.Increasing government scrutiny of projects funded by Amazon and Netflix is worrying many creators in Mumbai, the home of India’s film industry.Original shows on Amazon Prime and Netflix have lately drawn ire from Indian politicians and regular citizens who consider these films and TV shows insensitive to cultural and religious beliefs.Police complaints have piled up against creators and company executives, and some of the offenses they have been accused of — including committing “deliberate or malicious acts, intended to outrage religious feelings” — carry prison terms of up to three years, a fine, or both. Prime Minister Narendra Modi’s government has announced new rules and guidelines for streaming services, though no explicit bans on particular themes.India’s creative community now fears that streaming services may buckle under the pressure, and refrain from touching stories that are even remotely controversial. Check out the full story here.
Up next
Coming tomorrow:
- US consumer confidence data
- S&P Case-Shiller home price index
- BioNTech, McCormick, BlackBerry and Lululemon Athletica earnings.
Source: edition.cnn.com