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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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Tuesday, 01 March 16
CAN BULKCARRIER SUPPLY CUTS RESTORE SOME BALANCE? - CLARKSONS
The easing in bulkcarrier deliveries and the accelerated pace of demolition in recent years has seen bulkcarrier fleet growth slow from a rapid 17% ...
Monday, 29 February 16
BALTIC INDEX INCHES UP THIS PAST WEEK AS SMALLER VESSELS LEND SUPPORT
COALspot.com: The freight markets rose slightly this past week.
The Baltic Dry Index (BDI) of dry-bulk shipping freights, a measure of global ...
Monday, 29 February 16
LOSS OF EARNINGS IN THE WAKE OF A COLLISION - GARD
KNOWLEDGE TO ELEVATE
A shipowner’s loss of earnings can form a significant part of a collision claim. Awareness of the ways of calculati ...
Friday, 26 February 16
U.S WEEKLY COAL PRODUCTION UP SLIGHTLY
COALspot.com – United States the world’s second largest coal producer has produced approximately totaled an estimated 13.4 million shor ...
Thursday, 25 February 16
DRY BULKERS ARE SCRAPPED AT RECORD PACE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The newbuilding market is at a lull these days, as ship owners are focusing on two fronts, getting rid of excess dry bulk tonnage and snapping up b ...
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- Trasteel International SA, Italy
- Star Paper Mills Limited - India
- Australian Coal Association
- Kideco Jaya Agung - Indonesia
- Jindal Steel & Power Ltd - India
- Pendopo Energi Batubara - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Ministry of Finance - Indonesia
- GVK Power & Infra Limited - India
- Siam City Cement - Thailand
- Coal and Oil Company - UAE
- TNB Fuel Sdn Bhd - Malaysia
- Planning Commission, India
- Attock Cement Pakistan Limited
- Global Green Power PLC Corporation, Philippines
- Savvy Resources Ltd - HongKong
- Renaissance Capital - South Africa
- Larsen & Toubro Limited - India
- Antam Resourcindo - Indonesia
- Bhatia International Limited - India
- Simpson Spence & Young - Indonesia
- Economic Council, Georgia
- Kartika Selabumi Mining - Indonesia
- IHS Mccloskey Coal Group - USA
- Coastal Gujarat Power Limited - India
- Aboitiz Power Corporation - Philippines
- Billiton Holdings Pty Ltd - Australia
- Krishnapatnam Port Company Ltd. - India
- Xindia Steels Limited - India
- Ind-Barath Power Infra Limited - India
- Salva Resources Pvt Ltd - India
- Sakthi Sugars Limited - India
- Carbofer General Trading SA - India
- Samtan Co., Ltd - South Korea
- Cement Manufacturers Association - India
- Bukit Asam (Persero) Tbk - Indonesia
- Mintek Dendrill Indonesia
- Thai Mozambique Logistica
- Central Electricity Authority - India
- London Commodity Brokers - England
- International Coal Ventures Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- Parry Sugars Refinery, India
- PTC India Limited - India
- The State Trading Corporation of India Ltd
- Posco Energy - South Korea
- Indo Tambangraya Megah - Indonesia
- Jaiprakash Power Ventures ltd
- Bahari Cakrawala Sebuku - Indonesia
- Globalindo Alam Lestari - Indonesia
- Gujarat Sidhee Cement - India
- Parliament of New Zealand
- Lanco Infratech Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Independent Power Producers Association of India
- Directorate General of MIneral and Coal - Indonesia
- Borneo Indobara - Indonesia
- Marubeni Corporation - India
- Commonwealth Bank - Australia
- Orica Mining Services - Indonesia
- Eastern Coal Council - USA
- Tata Chemicals Ltd - India
- Essar Steel Hazira Ltd - India
- CIMB Investment Bank - Malaysia
- Kaltim Prima Coal - Indonesia
- Deloitte Consulting - India
- Singapore Mercantile Exchange
- Price Waterhouse Coopers - Russia
- Miang Besar Coal Terminal - Indonesia
- PNOC Exploration Corporation - Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Oldendorff Carriers - Singapore
- Power Finance Corporation Ltd., India
- ICICI Bank Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Mercuria Energy - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Semirara Mining Corp, Philippines
- Aditya Birla Group - India
- Timah Investasi Mineral - Indoneisa
- Vijayanagar Sugar Pvt Ltd - India
- ASAPP Information Group - India
- Africa Commodities Group - South Africa
- Ministry of Mines - Canada
- India Bulls Power Limited - India
- Bangladesh Power Developement Board
- Barasentosa Lestari - Indonesia
- Baramulti Group, Indonesia
- Manunggal Multi Energi - Indonesia
- Kobexindo Tractors - Indoneisa
- Cigading International Bulk Terminal - Indonesia
- Siam City Cement PLC, Thailand
- Heidelberg Cement - Germany
- Medco Energi Mining Internasional
- South Luzon Thermal Energy Corporation
- Straits Asia Resources Limited - Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sree Jayajothi Cements Limited - India
- Grasim Industreis Ltd - India
- Interocean Group of Companies - India
- Meralco Power Generation, Philippines
- Orica Australia Pty. Ltd.
- Indian Energy Exchange, India
- Global Business Power Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- Bayan Resources Tbk. - Indonesia
- Port Waratah Coal Services - Australia
- Wood Mackenzie - Singapore
- SMC Global Power, Philippines
- Holcim Trading Pte Ltd - Singapore
- Electricity Authority, New Zealand
- Bhushan Steel Limited - India
- Australian Commodity Traders Exchange
- Bukit Baiduri Energy - Indonesia
- OPG Power Generation Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- TeaM Sual Corporation - Philippines
- Energy Development Corp, Philippines
- Dalmia Cement Bharat India
- GN Power Mariveles Coal Plant, Philippines
- Sarangani Energy Corporation, Philippines
- Bharathi Cement Corporation - India
- Standard Chartered Bank - UAE
- Binh Thuan Hamico - Vietnam
- Gujarat Electricity Regulatory Commission - India
- AsiaOL BioFuels Corp., Philippines
- Minerals Council of Australia
- Mjunction Services Limited - India
- Kapuas Tunggal Persada - Indonesia
- Eastern Energy - Thailand
- Chettinad Cement Corporation Ltd - India
- Rio Tinto Coal - Australia
- IEA Clean Coal Centre - UK
- Energy Link Ltd, New Zealand
- Ceylon Electricity Board - Sri Lanka
- Makarim & Taira - Indonesia
- Uttam Galva Steels Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Thiess Contractors Indonesia
- Indika Energy - Indonesia
- Kumho Petrochemical, South Korea
- Pipit Mutiara Jaya. PT, Indonesia
- Romanian Commodities Exchange
- Metalloyd Limited - United Kingdom
- Indogreen Group - Indonesia
- SMG Consultants - Indonesia
- Sical Logistics Limited - India
- White Energy Company Limited
- Iligan Light & Power Inc, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Bukit Makmur.PT - Indonesia
- Maheswari Brothers Coal Limited - India
- MS Steel International - UAE
- PetroVietnam Power Coal Import and Supply Company
- Merrill Lynch Commodities Europe
- Directorate Of Revenue Intelligence - India
- Wilmar Investment Holdings
- Videocon Industries ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indian Oil Corporation Limited
- Intertek Mineral Services - Indonesia
- LBH Netherlands Bv - Netherlands
- Anglo American - United Kingdom
- Mercator Lines Limited - India
- Indonesian Coal Mining Association
- Formosa Plastics Group - Taiwan
- Therma Luzon, Inc, Philippines
- Alfred C Toepfer International GmbH - Germany
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Goldman Sachs - Singapore
- Tamil Nadu electricity Board
- Kepco SPC Power Corporation, Philippines
- New Zealand Coal & Carbon
- VISA Power Limited - India
- Petron Corporation, Philippines
- Vizag Seaport Private Limited - India
- Madhucon Powers Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Coalindo Energy - Indonesia
- CNBM International Corporation - China
- Agrawal Coal Company - India
- Banpu Public Company Limited - Thailand
- McConnell Dowell - Australia
- Ministry of Transport, Egypt
- GMR Energy Limited - India
- Central Java Power - Indonesia
- San Jose City I Power Corp, Philippines
- Latin American Coal - Colombia
- Neyveli Lignite Corporation Ltd, - India
- Georgia Ports Authority, United States
- Petrochimia International Co. Ltd.- Taiwan
- Karaikal Port Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- The University of Queensland
- Sojitz Corporation - Japan
- Vedanta Resources Plc - India
- PowerSource Philippines DevCo
- Bank of Tokyo Mitsubishi UFJ Ltd
- Gujarat Mineral Development Corp Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Bulk Trading Sa - Switzerland
- Meenaskhi Energy Private Limited - India
- Ambuja Cements Ltd - India
- SN Aboitiz Power Inc, Philippines
- Chamber of Mines of South Africa
- Asmin Koalindo Tuhup - Indonesia
- Global Coal Blending Company Limited - Australia
- Edison Trading Spa - Italy
- Electricity Generating Authority of Thailand
- Riau Bara Harum - Indonesia
- Bhoruka Overseas - Indonesia
- Malabar Cements Ltd - India
- Altura Mining Limited, Indonesia
- Semirara Mining and Power Corporation, Philippines
- The Treasury - Australian Government
- Asia Pacific Energy Resources Ventures Inc, Philippines
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