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Wednesday, 24 February 16
THIRTEEN - NOT ALWAYS AN UNLUCKY NUMBER? - CLARKSONS
 Back in early 1999 the price of a 5 year old Panamax bulkcarrier dipped to $13.5m, and ever since analysts have hailed purchase decisions made at that time as some of the most lucrative shipping deals ever seen. Today, with the price back at $13m, perhaps it’s a good time to reflect on how successful investors were back in 1999 and whether there are similar opportunities once again.
What Was The Deal?
The graph shows for each year since 1990 the return that would have been generated by the purchase of a 5 year old Panamax bulkcarrier at the start of the year, the subsequent operation for ten years at the prevailing one year timecharter rate and then the sale of the unit at the end of that period as a 15 year old (for units purchased in 2007 and later, disposal at start 2016 was assumed). At the end of 1999 investors could pick up a 5 year old Panamax bulker for $14m. Trading that vessel at the start year one year timecharter rate for 10 years would have generated estimated earnings of $66.5m (after opex), and then as a 15 year old unit in 2009 the vessel could have been sold for $12.5m. That’s a small loss of $1.5m on the asset but still a total return of $65m, and an impressive internal rate of return (IRR) of 26%.
Playing Snap
A few years later, 5 year old Panamax bulkcarrier purchases did perhaps even better. Buying a 5 year old in 2002, once again at $14m, trading at the timecharter rate and selling as a 15 year old would have generated total returns of $73.2m and an IRR of 41%, whilst the equivalent project in 2003 would have generated $66.1m and an IRR of 44%. These vessels would have generated boom earnings earlier in the project period, subject to a heavier weighting in terms of the internal rate of return calculation.
Not Always A Good Hand
However, not all investors are so lucky. In this example, 5 year old ships purchased since 2008 (and sold this year, so admittedly with less time to hit upon a period of boom earnings) generated negative returns, and those purchased pre-1995 an average IRR of 7%. Buyers in 2008 would have lost a whopping $82.1m on the asset. Nevertheless, there was clearly a golden period; in the years 1998-2006 investors would have achieved an IRR ranging between 20% and 44%.
Unlucky (Or Lucky) 13?
So for those who have had the stomach to buy in at difficult times, there have been more than ample rewards. Today the price of a 5 year old Panamax is back at $13m. Dry bulk fundamentals, particularly on the demand side with the Chinese economy maturing, don’t look helpful at all (see SIW 1207), but with the 5 year old price at almost half that of a newbuild, who really knows what the longer-term opportunity might be?
Fortune favours the brave, but they also say that fools rush in. The outlook seems scary but investors might also have half an eye on their peers who invested at low points in the price cycle in the past. That’s the beauty of volatile and cyclical sectors, but it’s tricky food for thought for shipping investors. Are they willing to party like it’s 1999? Have a nice day.
Source: Clarksons
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Wednesday, 24 February 16
HOW IS THE FUEL MIX FOR U.S. ELECTRICITY GENERATION CHANGING? - EIA
In recent years, there have been changes in the mix of fuels used to generate electricity in the United States. Natural gas and renewable energy so ...
Wednesday, 24 February 16
PRIVATE EQUITY FUNDS LOOKING TO EXIT SHIPPING, MOST NOTABLY DRY BULK, AS OVERORDERING HAS RESULTED IN EXCESS TONNAGE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The injection of more than $13 billion in shipping from various private equity funds over the past few years has resulted in what many feared would ...
Monday, 22 February 16
4200 GAR COAL INDEX SETTLES AT $27.02, DOWN 0.07% FROM LAST WEEK
COALspot.com: Average 5000 GAR coal index of Indonesian origin decline 0.17 percent week over week to averaging $38.89 per ton on this past Friday, ...
Monday, 22 February 16
FREIGHT MARKETS PICKED UP SLIGHTLY THIS PAST WEEK
COALspot.com: The freight markets picked up slightly this past week.
The Baltic Dry Index (BDI) of dry-bulk shipping freights, a measure of gl ...
Friday, 19 February 16
INDONESIAN HBA HITS A NEW LOWS BELOW $51 A TON AS OVERSUPPLY, LOW DEMAND WOES PERSIST
COALspot.com: Low coal demand and excess supplies sent Indonesian benchmark coal price further deep in February 2016. HBA has slumped second time t ...
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Showing 2551 to 2555 news of total 6871 |
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- Bayan Resources Tbk. - Indonesia
- Kumho Petrochemical, South Korea
- Sree Jayajothi Cements Limited - India
- Maharashtra Electricity Regulatory Commission - India
- GMR Energy Limited - India
- Economic Council, Georgia
- Siam City Cement PLC, Thailand
- Tamil Nadu electricity Board
- Australian Coal Association
- Borneo Indobara - Indonesia
- Kobexindo Tractors - Indoneisa
- PNOC Exploration Corporation - Philippines
- Thai Mozambique Logistica
- Chamber of Mines of South Africa
- Star Paper Mills Limited - India
- Global Coal Blending Company Limited - Australia
- Global Business Power Corporation, Philippines
- Goldman Sachs - Singapore
- San Jose City I Power Corp, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Bangladesh Power Developement Board
- Samtan Co., Ltd - South Korea
- Oldendorff Carriers - Singapore
- Wilmar Investment Holdings
- Bukit Asam (Persero) Tbk - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Pendopo Energi Batubara - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- LBH Netherlands Bv - Netherlands
- Ministry of Finance - Indonesia
- European Bulk Services B.V. - Netherlands
- Makarim & Taira - Indonesia
- Carbofer General Trading SA - India
- Siam City Cement - Thailand
- Central Electricity Authority - India
- Manunggal Multi Energi - Indonesia
- Indonesian Coal Mining Association
- Central Java Power - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- SMG Consultants - Indonesia
- GVK Power & Infra Limited - India
- The Treasury - Australian Government
- Global Green Power PLC Corporation, Philippines
- Jindal Steel & Power Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Coastal Gujarat Power Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Barasentosa Lestari - Indonesia
- Lanco Infratech Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Thiess Contractors Indonesia
- Posco Energy - South Korea
- Rashtriya Ispat Nigam Limited - India
- Timah Investasi Mineral - Indoneisa
- Agrawal Coal Company - India
- Karbindo Abesyapradhi - Indoneisa
- Essar Steel Hazira Ltd - India
- IHS Mccloskey Coal Group - USA
- Metalloyd Limited - United Kingdom
- PowerSource Philippines DevCo
- ICICI Bank Limited - India
- Intertek Mineral Services - Indonesia
- Jaiprakash Power Ventures ltd
- Therma Luzon, Inc, Philippines
- Iligan Light & Power Inc, Philippines
- The University of Queensland
- TeaM Sual Corporation - Philippines
- Gujarat Electricity Regulatory Commission - India
- Kideco Jaya Agung - Indonesia
- Maheswari Brothers Coal Limited - India
- Banpu Public Company Limited - Thailand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- White Energy Company Limited
- Kartika Selabumi Mining - Indonesia
- Bhoruka Overseas - Indonesia
- Electricity Authority, New Zealand
- Wood Mackenzie - Singapore
- Ministry of Mines - Canada
- Directorate General of MIneral and Coal - Indonesia
- Sical Logistics Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Chettinad Cement Corporation Ltd - India
- PTC India Limited - India
- Videocon Industries ltd - India
- Georgia Ports Authority, United States
- Australian Commodity Traders Exchange
- IEA Clean Coal Centre - UK
- Eastern Coal Council - USA
- Xindia Steels Limited - India
- Gujarat Sidhee Cement - India
- Latin American Coal - Colombia
- Tata Chemicals Ltd - India
- Parliament of New Zealand
- Leighton Contractors Pty Ltd - Australia
- Holcim Trading Pte Ltd - Singapore
- MS Steel International - UAE
- Krishnapatnam Port Company Ltd. - India
- Aditya Birla Group - India
- Simpson Spence & Young - Indonesia
- Romanian Commodities Exchange
- Bukit Makmur.PT - Indonesia
- McConnell Dowell - Australia
- Mjunction Services Limited - India
- Mintek Dendrill Indonesia
- Formosa Plastics Group - Taiwan
- Riau Bara Harum - Indonesia
- Sojitz Corporation - Japan
- Planning Commission, India
- CNBM International Corporation - China
- Bahari Cakrawala Sebuku - Indonesia
- Baramulti Group, Indonesia
- Sinarmas Energy and Mining - Indonesia
- Madhucon Powers Ltd - India
- Ambuja Cements Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Sarangani Energy Corporation, Philippines
- Commonwealth Bank - Australia
- Binh Thuan Hamico - Vietnam
- Renaissance Capital - South Africa
- Kapuas Tunggal Persada - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Merrill Lynch Commodities Europe
- Dalmia Cement Bharat India
- Medco Energi Mining Internasional
- Meralco Power Generation, Philippines
- Indian Energy Exchange, India
- Anglo American - United Kingdom
- Salva Resources Pvt Ltd - India
- Kepco SPC Power Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- Independent Power Producers Association of India
- Globalindo Alam Lestari - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Straits Asia Resources Limited - Singapore
- India Bulls Power Limited - India
- The State Trading Corporation of India Ltd
- OPG Power Generation Pvt Ltd - India
- Bhatia International Limited - India
- Uttam Galva Steels Limited - India
- Trasteel International SA, Italy
- Singapore Mercantile Exchange
- Aboitiz Power Corporation - Philippines
- Vedanta Resources Plc - India
- Edison Trading Spa - Italy
- SN Aboitiz Power Inc, Philippines
- Ind-Barath Power Infra Limited - India
- Mercator Lines Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Coal and Oil Company - UAE
- Power Finance Corporation Ltd., India
- Pipit Mutiara Jaya. PT, Indonesia
- Cement Manufacturers Association - India
- Alfred C Toepfer International GmbH - Germany
- Bulk Trading Sa - Switzerland
- SMC Global Power, Philippines
- Mercuria Energy - Indonesia
- Antam Resourcindo - Indonesia
- Marubeni Corporation - India
- Billiton Holdings Pty Ltd - Australia
- Vizag Seaport Private Limited - India
- Price Waterhouse Coopers - Russia
- Malabar Cements Ltd - India
- Grasim Industreis Ltd - India
- Larsen & Toubro Limited - India
- Energy Link Ltd, New Zealand
- Heidelberg Cement - Germany
- London Commodity Brokers - England
- GAC Shipping (India) Pvt Ltd
- Indo Tambangraya Megah - Indonesia
- Savvy Resources Ltd - HongKong
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Parry Sugars Refinery, India
- Semirara Mining Corp, Philippines
- Port Waratah Coal Services - Australia
- Eastern Energy - Thailand
- Orica Mining Services - Indonesia
- Ministry of Transport, Egypt
- Rio Tinto Coal - Australia
- Bukit Baiduri Energy - Indonesia
- New Zealand Coal & Carbon
- Petrochimia International Co. Ltd.- Taiwan
- Cigading International Bulk Terminal - Indonesia
- Semirara Mining and Power Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Indika Energy - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Attock Cement Pakistan Limited
- Petron Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- Altura Mining Limited, Indonesia
- Bhushan Steel Limited - India
- Sindya Power Generating Company Private Ltd
- Indogreen Group - Indonesia
- Interocean Group of Companies - India
- Standard Chartered Bank - UAE
- Minerals Council of Australia
- AsiaOL BioFuels Corp., Philippines
- Coalindo Energy - Indonesia
- Deloitte Consulting - India
- International Coal Ventures Pvt Ltd - India
- Africa Commodities Group - South Africa
- Ceylon Electricity Board - Sri Lanka
- Kaltim Prima Coal - Indonesia
- Orica Australia Pty. Ltd.
- ASAPP Information Group - India
- Asmin Koalindo Tuhup - Indonesia
- Sakthi Sugars Limited - India
- Toyota Tsusho Corporation, Japan
- Jorong Barutama Greston.PT - Indonesia
- CIMB Investment Bank - Malaysia
- Energy Development Corp, Philippines
- Electricity Generating Authority of Thailand
- Bharathi Cement Corporation - India
- Indian Oil Corporation Limited
- Karaikal Port Pvt Ltd - India
- VISA Power Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
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