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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 be the case, i.e. ordering more ships than the market needed to cater to demand. As a result, returns have plummeted, leaving many funds looking for a way out, most notably the dry bulk market, as tanker owners are still protected from the downturn. In its latest report, Gibson noted that “undoubtedly 2015 was a memorable year. For some a year to forget for tankers a year to enjoy. Whilst the misery has continued for many, tankers are still generating healthy returns a cross most sectors, in part aided by cheap bunker prices. However, sentiment, particularly in the tanker time charter market has certainly taken a hit as of late as the global economic outlook becomes increasingly bearish”.
According to Gibson’s analysis, global stock markets have witnessed a terrible start with the China led malaise wiping billions off investments across the globe, unsettling the nerves of many investors, which perhaps explains the loss of appetite for long term commitments. It may be the view of some wealth managers mantra that the economy remains on track but it is difficult for many to stay calm when your investments have dropped in value by 15 to 20 per cent since April 2015. Furthermore after the initial boost of low oil prices, much concern is now focused on the health of the major producers who have expensed vast sums of foreign cash reserves in the face of falling oil prices”.
The shipbroker also noted that “back in August 2014, we highlighted the growing role of private equity in the shipping sector as the involvement of major banks gradually faded from its peak in 2007. We speculated that at least $7 billion would come from this sector in 2014 which was still a drop in the ocean in their overall portfolios. Wilbur Ross estimated that private equity pumped $16 billion into shipping between 2008 and 2013 – two and a half times the amount generated through initial public offerings”.
Meanwhile, “whilst the tanker sector has so far escaped the horrors of dry cargo, there is no longer the hunger of investors to continue their involvement with shipping, as the overall performance of these investments has not fulfilled expectations and they are looking for a swift exit. We argued back in 2014 that the activity was being driven by “other people’s money “ without sufficient restraints which can result in over ordering and this has certainly been a factor. As a result of that activity, several larger private equity groups that invested in shipping in the past, have decided to cut their losses and sell. Investment funds and banks do not want to be shipowners, trying to sell off unwanted assets where the buyers have the upper hand”, Gibson said.
It went on to note “whilst many traditional shipping banks continue to wind down their shipping portfolios, other banks have signalled an intention to increase their presence in the sector with China’s CMB Financial Leasing looking to increase shipping and aviation from 12% of its existing book to 25-40%. This points towards conventional banks playing more of a role once again in ship finance, yet it may not be the traditional European banks fulfilling this role”.
Gibson said though, that “there is a great deal of pain at the moment but this will be seen by some shipowners in a positive light going forward, where realistic ship ping constraints return t o investment decisions, preventing the mass ordering of unwanted new buildings that we have seen from some of the recently funded players from private equity. There is no question that this scenario will put an enormous strain on shipyards who will need to be able to offer financing such as we have seen from Chinese banks and the Export credit agencies in other Asian shipbuilding nations. However their biggest problem is that the market has more than enough ships to meet demand and shipbuilders are struggling to fill their forward slots. This sort of market brings the cash buyer to the fore and there are clear signs that they are focusing in on the opportunities that are being presented. In the dry sector as prices plummet, the traditional second hand cash buyers are becoming increasingly visible. For now tanker owners remain very much protected by the continued healthy state of the market, but we should take nothing for granted as we will encounter more challenges as we progress through 2016”, the shipbroker concluded.
Source: Nikos Roussanoglou, Hellenic Shipping News
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Thursday, 03 March 16
BDI FURTHER STRENGTHENING; THE INCREASE IN RATES WAS NOT SUBSTANTIAL
COALspot.com: The BDI closed off on a positive note for a second week in a row, further strengthening the belief that the market might be bottoming ...
Thursday, 03 March 16
RIO TINTO COMPLETES SALE OF INTEREST IN BENGALLA JOINT VENTURE FOR US$616.7 MILLION
COALspot.com: Rio Tinto has completed the sale of its 40 per cent interest in the Bengalla coal Joint Venture in Australia to New Hope Corporation ...
Wednesday, 02 March 16
RE-EVALUATION OF MINING LICENSES CLEAN AND CLEAR STATUS IN INDONESIA
COALspot.com: In connection with the transfer of mining authority from Regents/Mayors to Governors1 and from Regents/Mayors and Governors to t ...
Wednesday, 02 March 16
OIL MY GOD.....!!!!
OIL my GOD….!!!!
The oil price “crash” that started in 2014 was caused by a glut of practically unwanted oil. Producers had be ...
Tuesday, 01 March 16
CS 42 (4200 GAR) COAL INDEX CLOSED AT US$ 27.11 A TON ON 26 FEBRUARY
COALspot.com: Average 5000 GAR coal index of Indonesian origin decline 0.31 percent week over week to averaging $38.77 per ton on this past Friday, ...
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- Binh Thuan Hamico - Vietnam
- Gujarat Mineral Development Corp Ltd - India
- The State Trading Corporation of India Ltd
- Therma Luzon, Inc, Philippines
- Miang Besar Coal Terminal - Indonesia
- Mintek Dendrill Indonesia
- Electricity Generating Authority of Thailand
- Kapuas Tunggal Persada - Indonesia
- Dalmia Cement Bharat India
- Latin American Coal - Colombia
- Georgia Ports Authority, United States
- Riau Bara Harum - Indonesia
- Manunggal Multi Energi - Indonesia
- Global Green Power PLC Corporation, Philippines
- Independent Power Producers Association of India
- Krishnapatnam Port Company Ltd. - India
- Ambuja Cements Ltd - India
- Essar Steel Hazira Ltd - India
- Kepco SPC Power Corporation, Philippines
- Videocon Industries ltd - India
- Wood Mackenzie - Singapore
- Anglo American - United Kingdom
- IHS Mccloskey Coal Group - USA
- Mercator Lines Limited - India
- Orica Australia Pty. Ltd.
- Merrill Lynch Commodities Europe
- Sarangani Energy Corporation, Philippines
- Kumho Petrochemical, South Korea
- Parliament of New Zealand
- Mjunction Services Limited - India
- Grasim Industreis Ltd - India
- Bhoruka Overseas - Indonesia
- Ministry of Finance - Indonesia
- Agrawal Coal Company - India
- Baramulti Group, Indonesia
- Samtan Co., Ltd - South Korea
- Bukit Makmur.PT - Indonesia
- Sindya Power Generating Company Private Ltd
- Petron Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- Renaissance Capital - South Africa
- Wilmar Investment Holdings
- Bukit Baiduri Energy - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Port Waratah Coal Services - Australia
- GAC Shipping (India) Pvt Ltd
- Africa Commodities Group - South Africa
- Coalindo Energy - Indonesia
- Tata Chemicals Ltd - India
- Indo Tambangraya Megah - Indonesia
- Carbofer General Trading SA - India
- Attock Cement Pakistan Limited
- Barasentosa Lestari - Indonesia
- Kideco Jaya Agung - Indonesia
- PowerSource Philippines DevCo
- Ministry of Transport, Egypt
- The University of Queensland
- CNBM International Corporation - China
- Sakthi Sugars Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Alfred C Toepfer International GmbH - Germany
- Rashtriya Ispat Nigam Limited - India
- Economic Council, Georgia
- Eastern Energy - Thailand
- Pendopo Energi Batubara - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Bukit Asam (Persero) Tbk - Indonesia
- Heidelberg Cement - Germany
- Energy Development Corp, Philippines
- Planning Commission, India
- Straits Asia Resources Limited - Singapore
- Siam City Cement PLC, Thailand
- Posco Energy - South Korea
- India Bulls Power Limited - India
- Maheswari Brothers Coal Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Vedanta Resources Plc - India
- Bayan Resources Tbk. - Indonesia
- VISA Power Limited - India
- Lanco Infratech Ltd - India
- SMC Global Power, Philippines
- Karaikal Port Pvt Ltd - India
- Makarim & Taira - Indonesia
- Parry Sugars Refinery, India
- Global Coal Blending Company Limited - Australia
- Salva Resources Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Chamber of Mines of South Africa
- Price Waterhouse Coopers - Russia
- GMR Energy Limited - India
- Meralco Power Generation, Philippines
- Indian Energy Exchange, India
- Australian Commodity Traders Exchange
- Aboitiz Power Corporation - Philippines
- The Treasury - Australian Government
- Mercuria Energy - Indonesia
- Trasteel International SA, Italy
- Bank of Tokyo Mitsubishi UFJ Ltd
- Electricity Authority, New Zealand
- GVK Power & Infra Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- SMG Consultants - Indonesia
- Vizag Seaport Private Limited - India
- PNOC Exploration Corporation - Philippines
- Eastern Coal Council - USA
- Formosa Plastics Group - Taiwan
- Toyota Tsusho Corporation, Japan
- Standard Chartered Bank - UAE
- Maharashtra Electricity Regulatory Commission - India
- Pipit Mutiara Jaya. PT, Indonesia
- Commonwealth Bank - Australia
- Siam City Cement - Thailand
- ASAPP Information Group - India
- Metalloyd Limited - United Kingdom
- Asmin Koalindo Tuhup - Indonesia
- Coal and Oil Company - UAE
- Xindia Steels Limited - India
- San Jose City I Power Corp, Philippines
- Sinarmas Energy and Mining - Indonesia
- SN Aboitiz Power Inc, Philippines
- OPG Power Generation Pvt Ltd - India
- Bhatia International Limited - India
- PTC India Limited - India
- Australian Coal Association
- Cement Manufacturers Association - India
- Sojitz Corporation - Japan
- Iligan Light & Power Inc, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Interocean Group of Companies - India
- Larsen & Toubro Limited - India
- Indonesian Coal Mining Association
- Simpson Spence & Young - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Banpu Public Company Limited - Thailand
- Minerals Council of Australia
- Global Business Power Corporation, Philippines
- IEA Clean Coal Centre - UK
- Deloitte Consulting - India
- Vijayanagar Sugar Pvt Ltd - India
- MS Steel International - UAE
- Semirara Mining Corp, Philippines
- Indian Oil Corporation Limited
- Semirara Mining and Power Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- Ministry of Mines - Canada
- Jindal Steel & Power Ltd - India
- Kartika Selabumi Mining - Indonesia
- Indogreen Group - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indika Energy - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- South Luzon Thermal Energy Corporation
- Neyveli Lignite Corporation Ltd, - India
- Marubeni Corporation - India
- Altura Mining Limited, Indonesia
- Central Java Power - Indonesia
- European Bulk Services B.V. - Netherlands
- Ind-Barath Power Infra Limited - India
- Gujarat Sidhee Cement - India
- Globalindo Alam Lestari - Indonesia
- Borneo Indobara - Indonesia
- Rio Tinto Coal - Australia
- TeaM Sual Corporation - Philippines
- Karbindo Abesyapradhi - Indoneisa
- CIMB Investment Bank - Malaysia
- Power Finance Corporation Ltd., India
- Coastal Gujarat Power Limited - India
- Tamil Nadu electricity Board
- McConnell Dowell - Australia
- Star Paper Mills Limited - India
- Intertek Mineral Services - Indonesia
- Singapore Mercantile Exchange
- Thai Mozambique Logistica
- New Zealand Coal & Carbon
- GN Power Mariveles Coal Plant, Philippines
- Thiess Contractors Indonesia
- Holcim Trading Pte Ltd - Singapore
- Romanian Commodities Exchange
- Antam Resourcindo - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Central Electricity Authority - India
- Bhushan Steel Limited - India
- Sical Logistics Limited - India
- Goldman Sachs - Singapore
- Jaiprakash Power Ventures ltd
- Directorate Of Revenue Intelligence - India
- Uttam Galva Steels Limited - India
- Bangladesh Power Developement Board
- Edison Trading Spa - Italy
- AsiaOL BioFuels Corp., Philippines
- Malabar Cements Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Bharathi Cement Corporation - India
- Oldendorff Carriers - Singapore
- Kaltim Prima Coal - Indonesia
- Aditya Birla Group - India
- Bulk Trading Sa - Switzerland
- Orica Mining Services - Indonesia
- Madhucon Powers Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Cigading International Bulk Terminal - Indonesia
- LBH Netherlands Bv - Netherlands
- Medco Energi Mining Internasional
- Leighton Contractors Pty Ltd - Australia
- White Energy Company Limited
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Timah Investasi Mineral - Indoneisa
- Kobexindo Tractors - Indoneisa
- Savvy Resources Ltd - HongKong
- International Coal Ventures Pvt Ltd - India
- Energy Link Ltd, New Zealand
- London Commodity Brokers - England
- Chettinad Cement Corporation Ltd - India
- ICICI Bank Limited - India
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