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

Managing Liquidity & Financial Challenges in a Downturn

By Socrates Leptos-Bourgi, Partner, PricewaterhouseCoopers

There is little doubt that over the last few months our world has changed.  As the US credit crisis has spread through the global banking system to the rest of the world, many years of relatively strong economic growth and booming world trade driven by the emerging economies have, rather abruptly, been replaced by an environment of poor liquidity, stagnant trading conditions and damaged consumer and investor confidence.

The impact on the shipping industry has been dramatic. While many anticipated that the buoyant shipping markets would not last forever, few expected the downturn to be as dramatic as it has been. Within weeks, daily hire rates barely meet daily operating costs, market values have dropped sharply, some charterers fail to meet their obligations, new orders at yards are being cancelled, yards are failing to deliver as planned, raising new finance is more difficult and more expensive and scrap values have decreased significantly. This caught most shipping companies and the other participants in the market unprepared for the new challenges ahead.

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