Thursday, May 21, 2009

Which shipping companies will survive?

According to Paul Slater, chairman and chief executive of First International, who was interviewed by Lloyd's List, the shipping companies listed in New York are now in the hands of "day traders".

He makes a very good point. I have been amazed at the activity and unreasonable price of Dryships stock, which Mr. Slater makes a specific reference to in the interview.

He also stated

MORE than half of the shipping companies with stock exchange listings could slide into bankruptcy or administration proceedings in the next year as their cash drains away.
.... forecast that the next 12 months would be “really painful” for the three main shipping sectors of containerships, dry bulk and tankers.

But those in NY are hoping to sweep away these concerns..

But Peter Shaerf, president of the non-profit New York Maritime and managing director of AMA Capital Partners, said shipping’s presence in New York’s capital markets had remained robust this year.

Trading volumes in shipping companies continued to increase, and $1.4bn had been raised in at-the-market or follow-on offerings this year.

The real problem is that most of the shipping companies continue to pay dividends, instead of trying to preserve cash. Investors are only looking at the dividend payments. This will catch up with them.

My money is on Mr. Slater

click here for article and video from Lloyd's List

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