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We are an independent shipbroker with an approach focused on expertise rather than scale.

Affinity Policy Comment 28 January 2019

 

Singapore your supper
The UK struggles to keep post-Brexit Britain enticing for business as companies gravitate to eastern markets.


British business has been left in Brexit no-man’s land, stuck between making major changes in business structure as protection from potential damage, or staying put and hoping negotiations will turn out for the best. Hopes for a favourable Brexit outcome have begun to wane though, as the UK government fails to secure a passable deal only weeks before the scheduled leave date of March 29th. Although numbers from the Institute of Directors say that 40% of businesses aren’t making contingency plans until the new UK-EU relationship is clear, some are less keen to play with fire. Dyson recently announced plans to move its HQ from the UK to Singapore, which entails moving two executives to the eastern city-state (CFO Jorn Jensen and CLO Martin Bowen), while changing none of its UK jobs, production or processes. Founder Sir James Dyson, an ardent Brexiteer, claims the move is in no way motivated by Brexit but by the company’s shift towards Asian consumers, given the region’s booming growth.

As a mere business strategy, many are considering the move a smart one. Dyson’s new focus has only done it favours so far, with profits spiking 30% in 2018 and surpassing  GBP 1 Bn, of which a rough 70% was powered by Asian growth. The OECD expects Asia to constitute 50% of the world’s middle and upper class by this year, while making up 60% of the world’s middle class spending power by 2030. KPMG Singapore underscored how any modern UK business strategy “has to place significant emphasis on Asia,” and that moving executives to the same time zone as the company’s most promising market is critical to staying competitive.

Britain’s political circles, however, are convinced of the correlation to Brexit. MPs point to the Singapore – EU free trade agreement signed this past October, which as of today offers more certainty in access to the EU single market from Singapore than from the UK. Sam Gyinah MP pointed to how moving HQs could also mean moving intellectual property and thus succumbing to  (knowingly more lax) Singaporean tax, a move he considers a “betrayal of the public.” Although the difference in corporate tax is marginal (19% in the UK and 17% in Singapore), the country is known for its generous tax benefits, including deductions for businesses basing their R&D in Singapore. The timing of the move was also uncanny, as the Brexit deadline creeps nearer with businesses being offered fewer certainties each passing day.

 








Dyson firmly denies Brexit’s relevance, emphasising the shift has been in the works for months and is to hardly impact tax paid and or their “patent-filing strategy.” According to Professor Murphy at City University of London, moving existing IP out of the UK would be a headache in itself, and thus unlikely. However, if Dyson becomes a leader in electric cars, its new baby and Singapore project, “then thousands of patents may follow,” and the location of these future patents could prove essential to Dyson’s earnings in years to come. Singapore’s laxness about companies moving IP and income into tax havens, and not taxing income earned abroad, could facilitate long-term wins in tax if the electric car industry takes off.

From a business perspective, is it not logical companies would want to avoid a potential Brexit disaster and tap into a growing market with guaranteed demand? Bentley has said a no-deal Brexit puts its profits at “fundamental risk,” and has begun plans to build more products for Asian markets, after sales to China rose 18% in 2018. Companies like Honda, Land Rover and Mini have also warned of major disruptions to productivity in the UK in the case of a no-deal Brexit. Airbus’ Tom Enders reminds Britain not to assume that just because “we have huge plants here, we will not move and we will always be here.”

So what can Whitehall do to keep major business from flocking east? Theresa May is advertising post-Brexit Britain as a “low tax and smart regulation” pro-business economy, and already plans to cut corporate tax to 17% by 2020, while others have heard talk of the UK turning towards a Singapore tax model. Dominic Raab even once said tax could even drop to 10%. Many aren’t convinced this will make the UK as competitive though, considering Singapore’s government owns a majority of housing and has a stake in key companies, meaning they are not as dependent on tax income as the UK, and thus can offer better tax benefits. Also, a recent HMRC forecast indicated dropping UK tax to 17% would cost the Treasury GBP 6.2 Bn.

Dyson’s announcement, a landmark move for the post-Brexit business debate, may seem like they are jumping ship, but others see it as an opportunity for companies to tap into major growth potential that may have otherwise gone overlooked. Either way, the UK is setting itself quite the challenge competing with the Asian economic machine without the help of the EU, or a protectionist USA for that matter.



Affinity Research LLP

what we do

  • Dry Cargo

    Dry Cargo

    Our dry bulk chartering teams in Sydney, Melbourne, Perth, Santiago, Lima, Montevideo, Singapore and London are cargo-focussed and they fix voyage, COA and time charter business on behalf of their clients with a wide range of ship owners.

    Contact: David Oakley
    [email protected]
    +61 2 9937 8806

    Finance

    Finance

    Affinity Financial Products Ltd is authorised by the FCA to provide advice and execution of regulated activities. We focus our efforts on asset-related transactions often structured as corporate share sales or mergers and acquisitions.
    We work in partnership with investment banks providing specific, shipping-related advice.

    Contact: Andrew Finn
    [email protected]
    +44(0)20 3142 0114

    LNG

    LNG

    Our young and dynamic LNG team possess wide-ranging experience of spot and term charters working with all major LNG shipowners and charterers. The LNG team has close interaction with the Newbuilding and Sale & Purchase divisions with an unrivalled track record of contracting LNG newbuildings and in the sale and purchase of LNG assets.
    We maintain up-to-date knowledge and an understanding of new technologies within the LNG sector to ensure that our clients can make the most suitable and cost-effective decisions on shipping solutions.

    Contact: Joni Mackay
    [email protected]
    +44(0)20 3142 0133

    Newbuilding

    Newbuilding

    Our Newbuilding team has concluded over 500 newbuildings of all types, including LNGCs, FSRUs, drillships, crude tankers, product tankers and dry cargo vessels. We have contracted in all major newbuilding centres globally, with particular focus on the Korean Shipyards.

    Contact: Nick Wood
    [email protected]
    +44(0)20 3142 0111

    Offshore

    Offshore

    Affinity Offshore is based out of our Oslo and Houston offices. The Team focuses on world-wide sale & purchase of offshore support vessels, as well as chartering – particularly in the Americas and Mediterranean/MENA regions.

    Contact: Tor-Øyvind Bjørkli
    [email protected]
    +47 2109 8211

    Research

    Research

    Our research department combines real time market information with econometric modelling and the latest technology. 

    Contact: Andy Hodgson
    [email protected]
    +44 (0) 20 3142 0182

    S & P

    S & P

    Our Sale & Purchase team has extensive experience of working with private clients, national shipping companies, major corporates, oil companies, grain houses and institutional investors. We provide a cradle to grave services across all shipping sectors. We operate from London, Singapore and Seoul to give 24-hour coverage of the markets, working for both newbuilding and second-hand buyers.

    Contact: Toby English
    [email protected]
    +44(0)20 3142 0123

    Tankers

    Tankers

    Our established tanker chartering teams serve the industry from London, Houston and Santiago delivering a highly proficient spot chartering service with a prime position in the fuel oil market. The team has close relationships with oil majors, national oil companies, oil traders and major ship owners and operators. 
    Our ethos for operations and post-fixture is simple: these roles are as important to us as the chartering/commercial function, and we continue to apply those same principles of professional ship broking throughout the life of each fixture.

    Contact: Tim Gurdon
    [email protected]
    +44(0)20 3142 0142

    Valuations

    Valuations

    We provide transparent, objective ship valuation service to major owners, banks and other financial institutions at short notice and a daily basis. We provide a retainer service for regular fleet valuations.

    Contact: Ben Pusey
    [email protected]
    +44(0)20 3142 0125

    Dry Cargo

    Our dry bulk chartering teams in Sydney, Melbourne, Perth, Santiago, Lima, Montevideo, Singapore and London are cargo-focussed and they fix voyage, COA and time charter business on behalf of their clients with a wide range of ship owners.

    Contact: David Oakley
    [email protected]
    +61 2 9937 8806

    Finance

    Affinity Financial Products Ltd is authorised by the FCA to provide advice and execution of regulated activities. We focus our efforts on asset-related transactions often structured as corporate share sales or mergers and acquisitions.
    We work in partnership with investment banks providing specific, shipping-related advice.

    Contact: Andrew Finn
    [email protected]
    +44(0)20 3142 0114

    LNG

    Our young and dynamic LNG team possess wide-ranging experience of spot and term charters working with all major LNG shipowners and charterers. The LNG team has close interaction with the Newbuilding and Sale & Purchase divisions with an unrivalled track record of contracting LNG newbuildings and in the sale and purchase of LNG assets.
    We maintain up-to-date knowledge and an understanding of new technologies within the LNG sector to ensure that our clients can make the most suitable and cost-effective decisions on shipping solutions.

    Contact: Joni Mackay
    [email protected]
    +44(0)20 3142 0133

    Newbuilding

    Our Newbuilding team has concluded over 500 newbuildings of all types, including LNGCs, FSRUs, drillships, crude tankers, product tankers and dry cargo vessels. We have contracted in all major newbuilding centres globally, with particular focus on the Korean Shipyards.

    Contact: Nick Wood
    [email protected]
    +44(0)20 3142 0111

    Offshore

    Affinity Offshore is based out of our Oslo and Houston offices. The Team focuses on world-wide sale & purchase of offshore support vessels, as well as chartering – particularly in the Americas and Mediterranean/MENA regions.

    Contact: Tor-Øyvind Bjørkli
    [email protected]
    +47 2109 8211

    Research

    Our research department combines real time market information with econometric modelling and the latest technology. 

    Contact: Andy Hodgson
    [email protected]
    +44 (0) 20 3142 0182

    S & P

    Our Sale & Purchase team has extensive experience of working with private clients, national shipping companies, major corporates, oil companies, grain houses and institutional investors. We provide a cradle to grave services across all shipping sectors. We operate from London, Singapore and Seoul to give 24-hour coverage of the markets, working for both newbuilding and second-hand buyers.

    Contact: Toby English
    [email protected]
    +44(0)20 3142 0123

    Tankers

    Our established tanker chartering teams serve the industry from London, Houston and Santiago delivering a highly proficient spot chartering service with a prime position in the fuel oil market. The team has close relationships with oil majors, national oil companies, oil traders and major ship owners and operators. 
    Our ethos for operations and post-fixture is simple: these roles are as important to us as the chartering/commercial function, and we continue to apply those same principles of professional ship broking throughout the life of each fixture.

    Contact: Tim Gurdon
    [email protected]
    +44(0)20 3142 0142

    Valuations

    We provide transparent, objective ship valuation service to major owners, banks and other financial institutions at short notice and a daily basis. We provide a retainer service for regular fleet valuations.

    Contact: Ben Pusey
    [email protected]
    +44(0)20 3142 0125

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    The Leadenhall Building
    122 Leadenhall Street
    London EC3A 8EE

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    079911

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  • #703, Shin-A Building
    50 Seosomun-ro 11gil
    Jung-gu, Seoul
    South Korea
    100-752

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    #703, Shin-A Building
    50 Seosomun-ro 11gil
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    South Korea
    100-752

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  • 601 Pacific House
    20 Queen's Road Central
    Central, Hong Kong

    T +852 2154 2237

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    Central, Hong Kong

    T +852 2154 2237

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  • 1301 McKinney Street
    Suite 2975
    Houston, Texas
    77010, USA

    T +1 832 925 7500

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    HOUSTON

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    Suite 2975
    Houston, Texas
    77010, USA

    T +1 832 925 7500

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  • Marco Polo Parkside Building 1204,
    Anli Road No. 80,
    Chaoyang District,
    Beijing, China, 100101

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    BEIJING

    LNG Tankers


    Marco Polo Parkside Building 1204,
    Anli Road No. 80,
    Chaoyang District,
    Beijing, China, 100101

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  • Av. Jorge Basadre 356,
    San Idro, Lima
    Peru

    T +51 1777 8944

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    LIMA

    Dry Cargo


    Av. Jorge Basadre 356,
    San Idro, Lima
    Peru

    T +51 1777 8944

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  • Augusto Leguia Norte 100
    Office 710
    Las Condes
    7550155 Santiago
    Chile

    T +56 22 352 7100

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    SANTIAGO

    Dry Cargo


    Augusto Leguia Norte 100
    Office 710
    Las Condes
    7550155 Santiago
    Chile

    T +56 22 352 7100

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  • Misiones St. 1372,
    1st Floor "De Los Patricios" Building,
    11000 Montevideo, Uruguay

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    MONTEVIDEO

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    Misiones St. 1372,
    1st Floor "De Los Patricios" Building,
    11000 Montevideo, Uruguay

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  • Inkognitogata 35,
    0256 Oslo
    Norway

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    OSLO

    Offshore


    Inkognitogata 35,
    0256 Oslo
    Norway

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