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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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- Ambuja Cements Ltd - India
- Coal and Oil Company - UAE
- Marubeni Corporation - India
- Standard Chartered Bank - UAE
- Intertek Mineral Services - Indonesia
- San Jose City I Power Corp, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Coalindo Energy - Indonesia
- Oldendorff Carriers - Singapore
- Binh Thuan Hamico - Vietnam
- Eastern Energy - Thailand
- Sindya Power Generating Company Private Ltd
- Power Finance Corporation Ltd., India
- Kumho Petrochemical, South Korea
- Chettinad Cement Corporation Ltd - India
- Aboitiz Power Corporation - Philippines
- Metalloyd Limited - United Kingdom
- Savvy Resources Ltd - HongKong
- Kartika Selabumi Mining - Indonesia
- Price Waterhouse Coopers - Russia
- Manunggal Multi Energi - Indonesia
- Global Business Power Corporation, Philippines
- Attock Cement Pakistan Limited
- Siam City Cement PLC, Thailand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Asmin Koalindo Tuhup - Indonesia
- Maheswari Brothers Coal Limited - India
- London Commodity Brokers - England
- Alfred C Toepfer International GmbH - Germany
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Deloitte Consulting - India
- Straits Asia Resources Limited - Singapore
- Pendopo Energi Batubara - Indonesia
- Bhushan Steel Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Iligan Light & Power Inc, Philippines
- Vedanta Resources Plc - India
- Barasentosa Lestari - Indonesia
- Grasim Industreis Ltd - India
- Indian Energy Exchange, India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Chamber of Mines of South Africa
- Star Paper Mills Limited - India
- Altura Mining Limited, Indonesia
- Antam Resourcindo - Indonesia
- Australian Commodity Traders Exchange
- TNB Fuel Sdn Bhd - Malaysia
- IHS Mccloskey Coal Group - USA
- GN Power Mariveles Coal Plant, Philippines
- GMR Energy Limited - India
- Electricity Generating Authority of Thailand
- Simpson Spence & Young - Indonesia
- ASAPP Information Group - India
- Indo Tambangraya Megah - Indonesia
- Interocean Group of Companies - India
- Gujarat Sidhee Cement - India
- Jaiprakash Power Ventures ltd
- Xindia Steels Limited - India
- Agrawal Coal Company - India
- Indogreen Group - Indonesia
- Commonwealth Bank - Australia
- SN Aboitiz Power Inc, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Posco Energy - South Korea
- Parry Sugars Refinery, India
- IEA Clean Coal Centre - UK
- Pipit Mutiara Jaya. PT, Indonesia
- White Energy Company Limited
- Bukit Baiduri Energy - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Planning Commission, India
- Kobexindo Tractors - Indoneisa
- Karbindo Abesyapradhi - Indoneisa
- Sinarmas Energy and Mining - Indonesia
- Makarim & Taira - Indonesia
- Indian Oil Corporation Limited
- Bayan Resources Tbk. - Indonesia
- Jindal Steel & Power Ltd - India
- Petron Corporation, Philippines
- Vizag Seaport Private Limited - India
- Semirara Mining and Power Corporation, Philippines
- GVK Power & Infra Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Renaissance Capital - South Africa
- MS Steel International - UAE
- Heidelberg Cement - Germany
- Riau Bara Harum - Indonesia
- Georgia Ports Authority, United States
- Aditya Birla Group - India
- Kaltim Prima Coal - Indonesia
- McConnell Dowell - Australia
- Ministry of Transport, Egypt
- Kapuas Tunggal Persada - Indonesia
- Global Green Power PLC Corporation, Philippines
- Lanco Infratech Ltd - India
- Videocon Industries ltd - India
- Bukit Makmur.PT - Indonesia
- Romanian Commodities Exchange
- Cement Manufacturers Association - India
- Semirara Mining Corp, Philippines
- Kideco Jaya Agung - Indonesia
- Mercator Lines Limited - India
- Baramulti Group, Indonesia
- Siam City Cement - Thailand
- Wood Mackenzie - Singapore
- Orica Mining Services - Indonesia
- Indika Energy - Indonesia
- Ind-Barath Power Infra Limited - India
- Indonesian Coal Mining Association
- Medco Energi Mining Internasional
- Holcim Trading Pte Ltd - Singapore
- Africa Commodities Group - South Africa
- Madhucon Powers Ltd - India
- Malabar Cements Ltd - India
- Sical Logistics Limited - India
- Banpu Public Company Limited - Thailand
- ICICI Bank Limited - India
- Port Waratah Coal Services - Australia
- Samtan Co., Ltd - South Korea
- Globalindo Alam Lestari - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- TeaM Sual Corporation - Philippines
- Trasteel International SA, Italy
- Kohat Cement Company Ltd. - Pakistan
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- AsiaOL BioFuels Corp., Philippines
- Coastal Gujarat Power Limited - India
- Sojitz Corporation - Japan
- Bhatia International Limited - India
- Billiton Holdings Pty Ltd - Australia
- Larsen & Toubro Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- SMC Global Power, Philippines
- Economic Council, Georgia
- Independent Power Producers Association of India
- Tamil Nadu electricity Board
- Sakthi Sugars Limited - India
- SMG Consultants - Indonesia
- Carbofer General Trading SA - India
- Energy Development Corp, Philippines
- Wilmar Investment Holdings
- CIMB Investment Bank - Malaysia
- Tata Chemicals Ltd - India
- The State Trading Corporation of India Ltd
- Timah Investasi Mineral - Indoneisa
- Meralco Power Generation, Philippines
- The Treasury - Australian Government
- Ceylon Electricity Board - Sri Lanka
- Ministry of Finance - Indonesia
- Energy Link Ltd, New Zealand
- Mjunction Services Limited - India
- Anglo American - United Kingdom
- CNBM International Corporation - China
- The University of Queensland
- Sree Jayajothi Cements Limited - India
- LBH Netherlands Bv - Netherlands
- Bulk Trading Sa - Switzerland
- Singapore Mercantile Exchange
- Bharathi Cement Corporation - India
- Eastern Coal Council - USA
- VISA Power Limited - India
- Orica Australia Pty. Ltd.
- Thiess Contractors Indonesia
- OPG Power Generation Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Minerals Council of Australia
- Therma Luzon, Inc, Philippines
- Bhoruka Overseas - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- India Bulls Power Limited - India
- Directorate Of Revenue Intelligence - India
- Miang Besar Coal Terminal - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Essar Steel Hazira Ltd - India
- International Coal Ventures Pvt Ltd - India
- Uttam Galva Steels Limited - India
- Sarangani Energy Corporation, Philippines
- Ministry of Mines - Canada
- South Luzon Thermal Energy Corporation
- Australian Coal Association
- Salva Resources Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Mercuria Energy - Indonesia
- Borneo Indobara - Indonesia
- GAC Shipping (India) Pvt Ltd
- Leighton Contractors Pty Ltd - Australia
- Central Electricity Authority - India
- Merrill Lynch Commodities Europe
- Bangladesh Power Developement Board
- PowerSource Philippines DevCo
- Thai Mozambique Logistica
- Toyota Tsusho Corporation, Japan
- PNOC Exploration Corporation - Philippines
- PetroVietnam Power Coal Import and Supply Company
- Latin American Coal - Colombia
- Mintek Dendrill Indonesia
- Formosa Plastics Group - Taiwan
- Jorong Barutama Greston.PT - Indonesia
- Krishnapatnam Port Company Ltd. - India
- PTC India Limited - India
- Kepco SPC Power Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- Kalimantan Lumbung Energi - Indonesia
- Electricity Authority, New Zealand
- Global Coal Blending Company Limited - Australia
- Rio Tinto Coal - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- Dalmia Cement Bharat India
- Gujarat Electricity Regulatory Commission - India
- Parliament of New Zealand
- New Zealand Coal & Carbon
- Central Java Power - Indonesia
- Goldman Sachs - Singapore
- Cigading International Bulk Terminal - Indonesia
- Edison Trading Spa - Italy
- Neyveli Lignite Corporation Ltd, - India
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