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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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Monday, 08 February 16
DRY-BULK SHIPPING DIVING DEEP
COALspot.com: The freight markets continued to fall this past week.
The Baltic Dry Index (BDI) of dry-bulk shipping freights, a measure of glo ...
Monday, 08 February 16
DRY BULK: SHIPBROKER SEES BDI MARKET REACHING LOW POINT OF 236 POINTS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The endless pit that is the dry bulk market over the past two months, has been the issue of debate among ship owners, shipbroker and analysts alike ...
Friday, 05 February 16
COAL INDIA EYES COAL MINES IN SOUTH AFRICA - PTI
“Coal India Ltd has plans of acquiring coal mines in South Africa,” an official said. It is looking at acquiring mines in partnership w ...
Friday, 05 February 16
U.S. WEEKLY COAL OUTPUT ROSE 4.2% TO 13.6 MMST
COALspot.com – United States the world’s second largest coal producer has produced approximately totaled an estimated 13.6 million shor ...
Thursday, 04 February 16
CAPESIZE: WEST AUSTRALIAN TO CHINA HAS BEEN CONCLUDED AT US$ 2.85 PMT AND THE C3 MARKET REMAINS INACTIVE - FEARNLEYS
Capesize
As everyone is getting ready for the Chinese new year, already depressed rates are under further pressure.
According to Fearnleys, ...
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- Leighton Contractors Pty Ltd - Australia
- Bulk Trading Sa - Switzerland
- Edison Trading Spa - Italy
- Dalmia Cement Bharat India
- Ceylon Electricity Board - Sri Lanka
- Bangladesh Power Developement Board
- Jorong Barutama Greston.PT - Indonesia
- Indian Energy Exchange, India
- GN Power Mariveles Coal Plant, Philippines
- IHS Mccloskey Coal Group - USA
- Banpu Public Company Limited - Thailand
- Deloitte Consulting - India
- Tata Chemicals Ltd - India
- Madhucon Powers Ltd - India
- Africa Commodities Group - South Africa
- Kalimantan Lumbung Energi - Indonesia
- Wilmar Investment Holdings
- Karaikal Port Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- Metalloyd Limited - United Kingdom
- Ministry of Mines - Canada
- Globalindo Alam Lestari - Indonesia
- Manunggal Multi Energi - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Tamil Nadu electricity Board
- Binh Thuan Hamico - Vietnam
- OPG Power Generation Pvt Ltd - India
- Singapore Mercantile Exchange
- Star Paper Mills Limited - India
- Videocon Industries ltd - India
- Sojitz Corporation - Japan
- Meenaskhi Energy Private Limited - India
- LBH Netherlands Bv - Netherlands
- Indo Tambangraya Megah - Indonesia
- Energy Link Ltd, New Zealand
- Antam Resourcindo - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Bhatia International Limited - India
- PTC India Limited - India
- Parliament of New Zealand
- European Bulk Services B.V. - Netherlands
- Semirara Mining Corp, Philippines
- The State Trading Corporation of India Ltd
- Semirara Mining and Power Corporation, Philippines
- Price Waterhouse Coopers - Russia
- Kaltim Prima Coal - Indonesia
- Siam City Cement - Thailand
- PowerSource Philippines DevCo
- Karbindo Abesyapradhi - Indoneisa
- White Energy Company Limited
- Coalindo Energy - Indonesia
- GVK Power & Infra Limited - India
- Gujarat Electricity Regulatory Commission - India
- Baramulti Group, Indonesia
- PNOC Exploration Corporation - Philippines
- MS Steel International - UAE
- Rio Tinto Coal - Australia
- Petrochimia International Co. Ltd.- Taiwan
- McConnell Dowell - Australia
- Ministry of Transport, Egypt
- Meralco Power Generation, Philippines
- Timah Investasi Mineral - Indoneisa
- Global Coal Blending Company Limited - Australia
- TeaM Sual Corporation - Philippines
- Central Java Power - Indonesia
- Bayan Resources Tbk. - Indonesia
- ICICI Bank Limited - India
- Power Finance Corporation Ltd., India
- Ind-Barath Power Infra Limited - India
- Commonwealth Bank - Australia
- Vedanta Resources Plc - India
- Central Electricity Authority - India
- International Coal Ventures Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Formosa Plastics Group - Taiwan
- Rashtriya Ispat Nigam Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Coastal Gujarat Power Limited - India
- Malabar Cements Ltd - India
- New Zealand Coal & Carbon
- Bhoruka Overseas - Indonesia
- Vizag Seaport Private Limited - India
- IEA Clean Coal Centre - UK
- Energy Development Corp, Philippines
- Anglo American - United Kingdom
- Mercuria Energy - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Makarim & Taira - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- SMC Global Power, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Bukit Makmur.PT - Indonesia
- Savvy Resources Ltd - HongKong
- Pendopo Energi Batubara - Indonesia
- Attock Cement Pakistan Limited
- Grasim Industreis Ltd - India
- Coal and Oil Company - UAE
- Posco Energy - South Korea
- Marubeni Corporation - India
- Neyveli Lignite Corporation Ltd, - India
- Lanco Infratech Ltd - India
- Orica Australia Pty. Ltd.
- Medco Energi Mining Internasional
- Bukit Baiduri Energy - Indonesia
- Altura Mining Limited, Indonesia
- Minerals Council of Australia
- Australian Commodity Traders Exchange
- Global Business Power Corporation, Philippines
- GMR Energy Limited - India
- Borneo Indobara - Indonesia
- Australian Coal Association
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Straits Asia Resources Limited - Singapore
- Planning Commission, India
- Aditya Birla Group - India
- Kepco SPC Power Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- VISA Power Limited - India
- Iligan Light & Power Inc, Philippines
- Intertek Mineral Services - Indonesia
- London Commodity Brokers - England
- Economic Council, Georgia
- Bhushan Steel Limited - India
- Siam City Cement PLC, Thailand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- CIMB Investment Bank - Malaysia
- Port Waratah Coal Services - Australia
- Asmin Koalindo Tuhup - Indonesia
- Gujarat Sidhee Cement - India
- Sarangani Energy Corporation, Philippines
- India Bulls Power Limited - India
- Carbofer General Trading SA - India
- Maheswari Brothers Coal Limited - India
- Romanian Commodities Exchange
- Electricity Authority, New Zealand
- Wood Mackenzie - Singapore
- Agrawal Coal Company - India
- Goldman Sachs - Singapore
- Mintek Dendrill Indonesia
- Mjunction Services Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- ASAPP Information Group - India
- Toyota Tsusho Corporation, Japan
- Alfred C Toepfer International GmbH - Germany
- GAC Shipping (India) Pvt Ltd
- Maharashtra Electricity Regulatory Commission - India
- Indogreen Group - Indonesia
- Latin American Coal - Colombia
- Vijayanagar Sugar Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Salva Resources Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- Indian Oil Corporation Limited
- Oldendorff Carriers - Singapore
- Eastern Coal Council - USA
- Standard Chartered Bank - UAE
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Jindal Steel & Power Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Cement Manufacturers Association - India
- Krishnapatnam Port Company Ltd. - India
- PetroVietnam Power Coal Import and Supply Company
- Pipit Mutiara Jaya. PT, Indonesia
- Interocean Group of Companies - India
- Mercator Lines Limited - India
- Petron Corporation, Philippines
- Essar Steel Hazira Ltd - India
- SN Aboitiz Power Inc, Philippines
- The University of Queensland
- Thai Mozambique Logistica
- Therma Luzon, Inc, Philippines
- Sree Jayajothi Cements Limited - India
- Holcim Trading Pte Ltd - Singapore
- Heidelberg Cement - Germany
- CNBM International Corporation - China
- Directorate Of Revenue Intelligence - India
- Cigading International Bulk Terminal - Indonesia
- Electricity Generating Authority of Thailand
- Bharathi Cement Corporation - India
- Chettinad Cement Corporation Ltd - India
- Kideco Jaya Agung - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Riau Bara Harum - Indonesia
- Merrill Lynch Commodities Europe
- Georgia Ports Authority, United States
- Sakthi Sugars Limited - India
- Eastern Energy - Thailand
- Sindya Power Generating Company Private Ltd
- Kobexindo Tractors - Indoneisa
- Orica Mining Services - Indonesia
- Trasteel International SA, Italy
- South Luzon Thermal Energy Corporation
- Kumho Petrochemical, South Korea
- Barasentosa Lestari - Indonesia
- Indika Energy - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Xindia Steels Limited - India
- Uttam Galva Steels Limited - India
- Kartika Selabumi Mining - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Sical Logistics Limited - India
- Larsen & Toubro Limited - India
- Global Green Power PLC Corporation, Philippines
- Independent Power Producers Association of India
- Renaissance Capital - South Africa
- Simpson Spence & Young - Indonesia
- Ambuja Cements Ltd - India
- Samtan Co., Ltd - South Korea
- Indonesian Coal Mining Association
- Thiess Contractors Indonesia
- Jaiprakash Power Ventures ltd
- Offshore Bulk Terminal Pte Ltd, Singapore
- Chamber of Mines of South Africa
- The Treasury - Australian Government
- Ministry of Finance - Indonesia
- SMG Consultants - Indonesia
- Parry Sugars Refinery, India
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