By Kevin Oates
…in the longer term shipping should correct but quality, transparency and financial strength are key to survival.
Despite the tough market and the general lack of ship finance, Marine Money’s Greek Ship Finance Forum again filled the seats in Athens. With 310 delegates and speakers and some 40 more for the TEN Ltd lunch, there was plenty gossip and exchange of views at the 11th Annual conference held on the 8th of October 2009.
The event had started with a speaker’s dinner the previous night co-hosted by Navios Maritime Holdings and was to end in the early hours of the following morning at the Capital Party co-hosted by Capital Product Partners LP at a well-known Athens nightclub. Even if the market is tough, we still know how to enjoy ourselves.
Back at the conference, our day began with Guy Verberne, a leading economist at Fortis Bank (Nederland) telling us that the economic recovery has come and it may well be sustainable. China, he says, has plenty foreign reserves to prolong it’s stimulus package for as long as it needs and he sees no meaningful cutbacks from the stimulus packages of western governments, at least through 2010. A risk is a double dip in 2011 if we get too bogged down in debt.
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Market Commentary | October 15th, 2009 |
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There is loads of chatter in the market these days about the fact that sharp declines we have seen in the BIFFEX are a pure repeat of what we’ve seen in previous years. The subject is particularly relevant for the many dry cargo companies, such as Wexford, Genco Shipping, Quintana, TBS and Eagle, that are planning to do IPOs in the coming months and would benefit from the dry markets regaining lost momentum.
As you can see from the accompanying graph, the decline in the Baltic Freight Index has been a seasonable phenomenon for the last couple of years. The question is when the market will come back. If this year is like 2003, the market will not come up until September, but if this year is like 2004, the market should start to turn back up in mid June.
Such bullish sentiment has been echoed through the market in recent weeks. At the Macquarie Metals & Mining conference in Beijing, the “overwhelming message from all the speakers so far is that underlying growth is still firm and there is minimal risk that government initiatives will lead to an imminent slow down.” Macquarie’s equities research also noted that “The current soft patch is simple inventory adjustment that may take a few months and impact some spot prices, but the overall dynamics of shortages remains unchanged.”
Of course, not everyone shares this view, which is what makes the market a market. Philippe van den Abeele, managing director Clarkson Securities, told the Bimco meeting in Copenhagen today, “If panamaxes go below $20,000 per day in the next two to three weeks, then I fear we can kiss the bull market goodbye.”
