Food for Thought

Sea-Asia 2009 kicks off in Singapore this week and Marine Money Asia had the pleasure to participate in the series of conferences to hear from industry leaders on where they think the markets may be heading. We present some notes from the event.

Li Zhen, Assistant President of Sinotrans Group is in the opinion that it will be difficult for many private shipyards particularly in Jiangsu, Zhejiang and Fujian provinces to secure special support from the central government. State-owned shipyards are the main beneficiaries from the government’s assistance programme. Continue Reading

Let the Stakeholders Speak

During our conference in Hong Kong, the panel titled “Stakeholders Unite: Owners, Investors & Lenders on What Comes Next” generated a lively discussion on the many issues revolving around shipping today including the role of private equity in shipping, China’s increasing dominance in the global supply chain and the funding gap of the global orderbook. We bring you some of the highlights. Continue Reading

Tidbits from Hong Kong

“Nothing in Life is to be Feared, it is only to be understood. Now is the time to understand more, so that we may fear less” Marie Curie, as quoted by Raghu Narain

We’ve had a lot of talk at our conferences lately about survival tools for the current market, whether these be bringing down costs, managing vessels properly, working out loans, hedging risks or any other manner of prudent activity. But we may, arguably, have left out the most important one: a sense of humor. And through the pessimism that pervaded our conference in Hong Kong, as we’re fairly sure pervades any rational discussion about prospects for ship finance, it was this persistent good humor that allowed owners, bankers, lawyers and analysts to get up and discuss openly the present situation and the pain that is still to come. It allowed them to engage one another on contentious topics to form realistic assessments and strategies. It allowed them to answer hard questions and make unpleasant predictions. In short, it allowed them to face the reality of the present crisis, and that together with a constant search for the understanding described by Marie Curie is very likely the little secret behind their resiliency to date.

Contributing significantly to this understanding was opening speaker Louis-Vincent Gave of GaveKal, a financial services firm that offers institutional investors and high net worth individuals fund management, independent research on global macro-economic trends and events, and independent advisory work on China and its impact on the global economy. Continue Reading

Navigating Rough Waters: Survival Today, Success Tomorrow

Did you know…

· Half of shipping bankers answering a survey last week would be comfortable financing a newbuild tanker…but 0% would be comfortable with a newbuild containership,

· 70% of these bankers expect shipping loan spreads to average over 300 basis points going forward…more than a third of these expect spreads to average over 400 basis points,

· 88% typically rely on LTV covenants – and half anticipate taking write-offs in 2009? Continue Reading

Malaysia: Challenges and Opportunities

Marine Money Asia hits the road this week as we head to Kuala Lumpur to present at the Maritime Financing Seminar 2009 put together by our friend Nazery Khalid at the Maritime Institute of Malaysia (“MIMA”) with the sponsor OCBC Bank. More than any other cities in the country, Kuala Lumpur represents the focal point of Malaysia in many aspects and the same can be said for ship financing. The two day seminar gathered an impressive list of over 80 delegates to discuss the current state and the opportunities for the growing Malaysian shipping industry. In his opening address, Director General Dato Cheah Kong Wai from MIMA highlighted some of Malaysia’s achievements in the maritime sector. Today, Malaysia is ranked by UNCTAD as the 18^th most important nation in terms of its 1.2% contribution to the world’s merchant fleet in 2008. In addition to two world class container ports – Port Klang and Pelabuhan Tanjung Pelepas, Malaysia’s national carrier MISC is the world’s largest owner-operator of LNG tankers with a fleet of 27 vessels. The nation is also the world’s 13^th largest producer of natural gas and 24^th largest in crude oil production which explains the vibrancy of its domestic oil and gas sector. Continue Reading

Passage

On a somewhat somber note, we observed, as we walked by 383 Madison Avenue, that the Bear Stearns name had been removed in its entirety, a victim like Arthur Andersen, if anyone recalls, of the financial follies of our times. The new signage brought back the old brand J.P. Morgan & Co. under which the investment bank will operate. While we wish JP Morgan good luck, we hope the Bear Stearns employees all land on their feet in these tough times.

Mind the G & A

Shareholders in Euroseas Ltd should be encouraged by the cost saving ways of their management team. Having left the NYSE, we jumped on the subway to head uptown to the Speakers’ Dinner. As we exited the subway at the 53rd Street station just in front of us were Messers. Pittas and Aslidis. No limos for these gentlemen

A Launch Party

When you want to buy oil, you can buy an oil future. When you want to buy an oil company, you can buy Exxon Mobil and if you want to buy a basket of oil companies you can buy an ETF. But what is an investor who wants exposure to the shipping market to do? Dahlman Rose & Co. may have the answer.

As part of the Marine Money Week extravaganza, Dahlman Rose launched its new Dry Bulk and Tanker Shipping Indexes, a concept they have been working on for some time. The venue was the beautiful Victorian Gardens in Central Park and it was an exciting conclusion to an event filled week.

Hail Britannia!

On Wednesday shares of Britannia Bulk were fully sold at $15, below the $17 to $19 expected range. Given the volatility of the recent week in the dry bulk markets, we believe this to be a huge success and congratulate the company and its bankers, Goldman Sachs, Banc of America, Dahlman Rose and Oppenheimer on a deal well done.

That Was The Week That Was

Marine Money’s flagship conference came to New York this week and if you were a kid you might refer to it as a three- ring circus. With the conference as the centerpiece, the week has become filled not only with the usual owner/banker meetings but formal presentations and the usual bevy of social events. The numbers are astounding with over 1,000 delegates registered this year, exceeding by far all previous years. In fact, as quickly as we printed a copy of the delegate list, we found it to be obsolete.