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Blue economy – The ocean… land of innovation – Investors' Corner – Investors' Corner BNP Paribas

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The seas and oceans are fertile ground for innovation and experimentation, with new technologies including:

  • Maritime operations at ever-greater depths
  • Robotics
  • Video surveillance
  • Submersible technologies.

Technological progress has been spectacular. In general, the open location of ports and coastal communities is conducive to the emergence of new ideas. Achieving environmental goals is a constant source of innovation.

Biotechnologies

The oceans are a goldmine for biotechnologies. Maritime resources can be used

  • In cosmetics (creams, seawater therapy, etc.)
  • For the agri-foods industry (food supplements, fertilisers, etc.)
  • In the energy sector (notably biofuels)
  • In pharmacology.

It is possible to create substances derived from algae for food and cosmetics uses. In addition, scientists have discovered that ingredients from oysters can slow skin ageing. The production of biofuels from the triglycerides contained in algae is another potential area of interest.

Lithium

Seawater is a virtually unlimited source of lithium, with the seas and oceans containing some 230 billion tonnes of it.[1] However, lithium is highly diluted in seawater.

Researchers have been working for years to extract it using evaporation or filtering membranes. They have already managed to do so in small quantities. Lithium is used in the glass and ceramics industries, to produce lubricant greases and in aluminium production. It is also essential in making electric batteries.

Energy

The enormous energy in tides, swells and waves is already being tapped. However, this is just the beginning. Innovative technologies will complement the systems already developed.

Source: https://ec.europa.eu/jrc/en/news/new-technologies-ocean-energy-sector

The most favourable coasts are those between the latitudes of 30° and 60°

  • In the southern hemisphere due to the wave heights
  • In the northern hemisphere due to the length of the coasts in question.

The Bay of Fundy’s tidal power station between Nova Scotia and New Brunswick in Canada and the one in the bay of Mont Saint-Michel in France were pioneers in the field. In addition to tidal power stations, systems using energy from waves and tidal currents (underwater turbines and wave power systems) are also being developed.

The European Union, already quite advanced in the field of ocean power technology, should be producing 35% of its electricity from ocean sources by 2050.[2] Reducing the cost of technologies generating wind power is one of the main projects on which the most innovative blue economy players are working.

Pharmaceuticals

The ability of marine organisms other than fish and shellfish to contribute to the blue economy is beginning to be acknowledged thanks to the new gene sequencing technologies for living organisms. Tests of antiviral medicines obtained from nucleotides isolated from Caribbean sponges are already under way. That’s how high the stakes are!

The oceans are a gigantic pharmacy. Marine species are providing the pharmaceutical industry with a wide range of new compounds that have already led to major applications in the antiviral field, but also in cancer and pain treatment medicines.

The animal, plant and bacterial species living in the oceans contain impressive numbers of compounds with unexpected properties that are of interest from a medical standpoint. Some are already known such as those from ‘cone snails’ – gastropod molluscs.

These cousins of land snails secrete neurotoxins. Researchers have been working with them since the 1960s. Cone snails have enabled the development of a compound used in a powerful pain medicine that is stronger than morphine. Researchers are currently working on developing new medicines from cone snail compounds.

Anti-cancer agents are being produced from marine organisms. An anti-tumour medicine has been developed from small marine invertebrates. The most promising medicines already come from the oceans. They have been on pharmacy shelves and have been improving our health for several years now. The research on marine organisms being conducted around the world should continue to unveil new therapeutic properties.

A flourishing sustainable blue economy

Innovation is an essential factor in ensuring that a sustainable blue economy can flourish. Blue technologies hold great promise for established and start-up companies researching and developing solutions that have a positive impact on the oceans.

As a global sustainability theme, investing in the blue economy is fully aligned with BNP Paris Asset Management’s sustainable investment priorities. These are focused on the energy transition, environmental protection and equality & inclusive growth.

We believe investing in the blue economy will help advance the fight against climate change and ensure that the oceans can continue to function as a sink for carbon emissions from human activity. Such investments are suited for investors with a long-term perspective, an interest in contributing to a greener future and making a positive impact.

In our view, finance can play a major role in pushing companies linked to the blue economy to improve their practices. Those investors who consider the preservation of marine resources as an absolute priority are set to see investment opportunities in companies that develop marine and ocean projects opening up as awareness of the blue economy’s appeal grows.


[1] According to Agence internationale de l’Énergie in futura-sciences.com 21/07/2020

[2] See energiesdelamer.eu 12/06/2020


Read more about sustainable investing


Any views expressed here are those of the author as of the date of publication, are based on available information, and are subject to change without notice. Individual portfolio management teams may hold different views and may take different investment decisions for different clients. This document does not constitute investment advice.

The value of investments and the income they generate may go down as well as up and it is possible that investors will not recover their initial outlay. Past performance is no guarantee for future returns.

Investing in emerging markets, or specialised or restricted sectors is likely to be subject to a higher-than-average volatility due to a high degree of concentration, greater uncertainty because less information is available, there is less liquidity or due to greater sensitivity to changes in market conditions (social, political and economic conditions).

Some emerging markets offer less security than the majority of international developed markets. For this reason, services for portfolio transactions, liquidation and conservation on behalf of funds invested in emerging markets may carry greater risk.

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Economy

Canadian dollar moves to extend weekly win streak as oil rebounds

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Canadian dollar

The Canadian dollar strengthened against its U.S. counterpart on Friday and was on track for its seventh straight weekly gain as oil prices rose and domestic data added to evidence of robust economic growth in the first quarter.

Canadian factory sales rose 3.5% in March from February, led by the motor vehicle, petroleum and coal, and food product industries, while wholesale trade was up 2.8%, Statistics Canada said.

The price of oil, one of Canada‘s major exports, reversed some of the previous day’s sharp losses as stock markets strengthened, though gains were capped by the coronavirus situation in major oil consumer India and the restart of a fuel pipeline in the United States.

U.S. crude prices rose 1.2% to $64.61 a barrel, while the Canadian dollar was trading 0.6% higher at 1.2093 to the greenback, or 82.69 U.S. cents, moving back in reach of Wednesday’s 6-year peak at 1.2042.

For the week, the loonie was on track to gain 0.3%. It has climbed more than 5% since the start of the year, the biggest gain among G10 currencies, supported by surging commodity prices and a shift last month to a more hawkish stance by the Bank of Canada.

Still, BoC Governor Tiff Macklem said on Thursday if the currency continues to rise, it could create headwinds for exports and business investment as well as affecting monetary policy.

The U.S. dollar fell against a basket of major currencies, pressured by a recovery in risk appetite across markets after Federal Reserve officials helped calm concerns about a quick policy tightening in response to accelerating U.S. inflation.

Canadian government bond yields were lower across much of a flatter curve, with the 10-year down 2 basis points at 1.549%. On Thursday, it touched its highest intraday in eight weeks at 1.624%.

 

(Reporting by Fergal Smith; Editing by Nick Zieminski)

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Toronto Stock Exchange rises 1.21% to 19,366.69

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Toronto Stock Exchange

* The Toronto Stock Exchange‘s TSX rises 1.21 percent to 19,366.69

* Leading the index were SNC-Lavalin Group Inc <SNC.TO​>, up 16.0%, Village Farms International Inc​, up 9.8%, and Denison Mines Corp​, higher by 9.4%.

* Lagging shares were Aurora Cannabis Inc​​, down 7.2%, Centerra Gold Inc​, down 3.8%, and Canadian National Railway Co​, lower by 3.7%.

* On the TSX 194 issues rose and 35 fell as a 5.5-to-1 ratio favored advancers. There were 25 new highs and no new lows, with total volume of 225.7 million shares.

* The most heavily traded shares by volume were Enbridge Inc, Manulife Financial Corp and Cenovus Energy Inc.

* The TSX’s energy group rose 3.32 points, or 2.7%, while the financials sector climbed 4.80 points, or 1.3%.

* West Texas Intermediate crude futures rose 2.65%, or $1.69, to $65.51 a barrel. Brent crude  rose 2.68%, or $1.8, to $68.85 [O/R]

* The TSX is up 11.1% for the year.

This summary was machine generated May 14 at 21:03 GMT.

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Economy

U.S., Mexico, Canada to hold ‘robust’ talks on trade deal

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The United States, Mexico and Canada will next week hold their first formal talks on their continental trade deal, with particular focus on labor and environmental obligations, the U.S. government said on Friday.

Trade ministers from the three nations are set to meet virtually on Monday and Tuesday to discuss the U.S.-Mexico-Canada (USMCA) deal, which took effect in July 2020.

“The ministers will receive updates about work already underway to advance cooperation … and will hold robust discussions about USMCA’s landmark labor and environmental obligations,” the office of U.S. Trade Representative Katherine Tai said in a statement.

The United States is also reviewing tariffs which may be leading to inflation in the country, economic adviser Cecilia Rouse told reporters at the White House on Friday, a move that could affect hundreds of billions of dollars in trade.

The United States, testing provisions in the new deal aimed at strengthening Mexican unions, this week asked Mexico to investigate alleged abuses at a General Motors Co factory.

(Reporting by David Ljunggren; Editing by Hugh Lawson and Jonathan Oatis)

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