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