It probably sounds a bit odd but the truth of the matter is that investing in shipping now that the BDI is on a free fall (it was all along over the last 14 months) does make sense. Today’s minus 13 points it might be the lucky number – Agatha Christie knew best! John Faraclas writes:
With the exception of the Panamaxes that gave a 20 plus points in its respective BDI, all other indices, including the wets, where on a free fall again – how much will the Chinese New year affect the markets? Will after all see a better market and never “capitulate” on one more excuse of why the market is down?
For the record, earlier on today: BCI 652 down 48 points! BPI 489 up 20; BSI down 12 at 496 (breaking also the 500 mark barrier); BHSI 273 down 8 – long live the 300 points mark. The Wets as said had a bad day with the Dirties and their respective BDTI at 870 down 16 and the Cleans and their respective BCTI at 590 down 9!
In aviation we know and fully understand that airplanes take off against the wind, equally at sea you go with the wind. What matters is who trusts your business intuition, and that’s all (well, you need a lot to know, geopolitics is the name of the game…). Funding a new shipping venture is the most promising thing to do these days, provided your client has some cash to spare and support the initial one/two years of operation, until the markets, yes the markets in plural, pick up. There are also going to come out for sale many wrongly financed ships and Maritime Fraud / Banking scandals will surface. On this issue, under which criteria banks where lending even their first class clients? Watch-out for the white nights buying shares in the listed shipping companies… It’s gona be good fun, and why not!
We are witnessing some consolidation in the dry sector chartering activities with new pools being formed, as well as in the boxes – particularly in the liner sector, but, with all due respect, you need to know how to swim alone. 2015 according to all predictions will be an interesting year, but chaos and war will also reign creating a complete different platoon from the one everybody expects. When we say “war”, we mean all kinds of war, particularly an economic war; remember: war is good even for the warring ones!
China will be cornered if Greece faces more problems by the European inhumane attitude versus Greece and its people, when all of Europe’s politicians kept a blind eye on the forty-years lending spree to Greece and its business conglomerates using despicable lending practices or involvement in winning business in Greece. The business / trade logistical advantage of Greece with COSCO’s investments in Piraeus and possible in other Greek Ports, offers a competitive advantage to the Chinese. But does the new Greek leaders since the 25th of January 2015 and their coalition bedfellows understand this? These and other issues will affect trade and coupled with Islamist revolts could create an upheaval in all markets.
New pipelines in the Eastern European and Black Sea basin will raise the stakes. The British elections in almost three months will be one of the most interesting ones in a lifetime; many issues at stake and it doesn’t look that there will be one single party to have an overwhelming majority to rule, make or break! In twenty months on he 8th of November 2016 the American elections are on; another important day for world peace, economy and shipping of course…
Finally president Obama, Mrs. Merkel and Mr. Putin, as well as Mr. François Hollande should also include Mr. David Cameron and Mr. Xi Jinping in solving global and peripheral problems. I would add one African leader, one Australian, one from the Subcontinent – where 1, 4 billion people live, a South American and one from the Arab World to make things happen and see real World Democracy functioning. Otherwise expect more mess. I endorse the latter, as it seems utopic to have them all involved, unless there is genuine humane willingness. All these chaotic situations and uncertainty, with volatility making waves do affect the shipping markets and might one day, for different reasons all together witness the extremes taking place: a BDI down at even 300 or at 4, 000 to break the impulse.
When back in July 2008 I had in writing predicted the collapse not only of eh BDI by September, but that of the world economy, I saw many raised eyebrows… All in al and in all cases, business and politics, people and cases are dead but won’t lie down; pity…. That includes for example, Wolfgang Schaeuble’s et al adamant and inhumane German position versus Greece and the shipping banking world’s inability to finance new ships… Fairs fair to include some academics’ wrong skills and tactics, despite defending the right issue in the eyes of the world, and victimised Greeks, ; the end result would “justify” them or send them to the guillotine…?Just wait and see both issues what will bring at the end of the day; Oh! well, Hasta la vista baby!
Have a nice evening and be on… guard tomorrow Friday 13th!