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SUMMARY
Dry Bulk shipping is fundamental to
world trade and its success or otherwise
both mirrors and enables international
development and this makes its
investors likely to be the beneficiaries of
mid to long term gains, provided their
ships can ride the waves of sometimes
severe, shorter term pain which
punctuate the good times. For the
individual investor, the key to success
in this sector is clearly in the timing of
entry and exit and given the complexity
of the factors instrumental in shaping
the market, this is not easy and presents
not inconsiderable risk.
Nonetheless, with expert advice, the
potential upsides, even in the short
term, could be significant if the market
recovery takes hold as commentators
have forecast. Whilst publicly quoted
shipping companies have been battered
by conditions for several years and
have consequently posted major losses,
those with short term goals and free
from having to take on bank debt, could
reap the rewards even if we have not yet
reached the bottom of the market.
Accessing the market has certainly
become easier in the last ten to fifteen
years, with more corporate shares
available and evidence of successful
Enterprise Investment Schemes.
However, there have been casualties of
the faltering and falling market since the
credit crunch took hold in 2008/2009,
with multi-vessel owning companies
such as Copenship, Winland Ocean
Shipping Corp, and Daebo International
Shipping filing for bankruptcy in 2015 as
they were simply unable to withstand
the continuing harshness of the sector
price environment making repayment
of their debts unsustainable. Yet, in
December 2015, Martin Stopford, the
non-executive president of Clarksons
Research, stated that, “These moments
of deep negative sentiment are often a
good time to invest, especially if finance
is in short supply.
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Consequently, in a short term setting, as
a small part of an overall portfolio, given
the forecast for an eventual upturn in
the market with a healthier balance of
the supply of ships against required
movement of commodities, individual
investors who seek out well-informed
and experienced guidance may well take
the view that this is a good time to take
a greater interest in Dry Bulk shipping.
“Whosoever commands the sea, commands the trade;
whosoever commands the trade of the world, commands the
riches of the world, and consequently the world itself.“
Sir Walter Raleigh (c1552-1618)