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