2007

Signs of the Times: Certainly Uncertain

There is no doubt that 2004-2006 were years of growth for shipping companies. Not just earnings growth of course; 2006 saw earnings fall for many companies. One area of real growth was in opportunity through the expansion of shipping’s relationship with the capital markets. We see a lot of nervous energy in the early days of 2007, with various sectors trending in different directions. A warm winter in North America and Europe and full reserves in China have made December and January’s tanker market as disappointing as the summer’s tanker market was exciting…so much for seasonal trading. But not all sectors are feeling the pinch, and many players are just now able to take advantage of the opportunities that were available primarily to mainstream tanker and dry bulk players in 2004 and 2005.

Lessor First Ship Lease, for example, expands its portfolio while shipmanager V.Ships explores strategic opportunities for its owners. Hedge fund QVT debates the value in Top Tankers while Kelso nearly completes divesting its interest in Eagle Bulk and investors in Precious Shipping gauge the political situation in Thailand. Euroseas prepares for a growth spurt even as some of its contemporaries begin to reorganize. König and HSH create a product to draw new investors into shipping while tanker analysts debate supply and demand dynamics. And of course the debt market marches on.

This is only an excerpt of The Week in Review – 01/11/2007

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