DHL 2007 Annual Report Download - page 32
Download and view the complete annual report
Please find page 32 of the 2007 DHL annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.28
Deutsche Post World Net Annual Report 2007
Sharp rise in oil price
International oil prices soared during 2007. A barrel of Brent Crude, which was trad-
ing for less than US$60 at the start of the year, peaked at almost US$100 and closed
2007 only marginally lower. e annual average oil price was around 10% higher
than in 2006.
Steep decline in US dollar
Following a moderate rise in the rst six months, the euro strengthened enormously
to close the year at US$1.46. Its value therefore appreciated by 10.6%. e gain was
driven by the crisis on the sub-prime mortgage market, which imposed a substan-
tial burden on the nancial markets. e fear of a recession in the USA grew and
prompted a cut in the Federal Reserve key interest rate to 4.25% from September.
Since the European Central Bank (ECB) had raised its key interest rate by 0.5% to
4% in the rst half of the year and proceeded to hold it steady, the dollar’s interest
rate advantage was seriously eroded as the year unfolded. Measured against pound
sterling, the euro posted a 9.1% gain.
Apprehensive fi nancial markets blight corporate bonds
e economic upswing and base rate increases fuelled a strong rise in capital market
returns in the rst half of 2007. erea er, following the mortgage crisis, govern-
ment bonds were once again seen as a safe haven. At the end of the year, ten-year
US treasury bonds were yielding around 0.6 percentage points less than at the close of
2006. In contrast, the yield on German ten-year treasury bonds increased by a good
0.3 points to 4.3% in the same period. Although long-term interest rates remain low,
the climate for corporate bonds has deteriorated appreciably. Apprehension in nan-
cial markets has made investors more risk averse and risk premiums have increased
signi cantly as a consequence, even for high-quality corporate bonds.
International trade continues to grow strongly
Underpinned by increased o -shoring of production and the global sourcing of goods
and services, trade volumes are expanding more than twice as fast as industrial pro-
duction. Here a shi in the pattern of growth is becoming visible: Import demand is
moving away from high-income countries towards emerging markets. Import growth
in these markets came to around 12.5%, compared to only 6.8% in the high-income
countries. On the export side, growth in developing countries and emerging markets
has been twice as fast as in high-income countries since 2000 (10.8% versus 5.1% a year
on average). Intra-Asian trade ows have already become the largest trade lane in the
global arena and continue to grow at an outstanding 10.8% (CAGR 2006 – 2009). In
second place comes trade between Asia Paci c and Europe, which is growing by 10.1%
per year. e following diagram shows the most important international trade ows
(foreign trade volumes larger than €100 billion) and their growth rates.