Marine Money: positive outlook for 2015

Despite the current economic outlook, it’s a ripe market for shipping investment, today’s Marine Money conference was told.

“2015 has started with a bang, with opportunities … to invest,” Mia Jenson, Marine Money director, said at the opening the 6th annual Marine Money forum in London today.

Themed ‘Capital formation for shipping – financing and investment ideas for 2015’, private equity is high on the agenda. This recognises that today’s economic concerns, the fall in oil prices and the need for consolidation will shape shipping this year.

“The fall in oil prices is having an impact,” said Ted Jadick, president and CEO of DNB Markets, “not just on the shipping industry but on the entire global economy and everyone is busy trying to figure out what impact this will have on our shipping companies.”

Global challenges are playing their part. “Economic growth in Europe is extremely weak, growth in China is slowing, and Japan’s future remains uncertain,” Jadick said. “Furthermore, the BRICS are a bit broken and geopolitical risk is on the rise. As a result, market volatility has increased significantly,” he said.

There are, however, benefits to every swing in the market, he told delegates. “I am quite convinced that this current market will create good opportunities for the investors.”

Torbjorn Kjus, DNB Markets chief oil analyst, predicted a quick turnaround in oil prices. “We expect a fairly quick recovery and predict $70/barrel before the end of this year,” he said.

Pointing to BP’s announcement of job cuts at the company’s North Sea operation as a result of falling oil price, Kjus said: “BP said today [it is] freezing salaries, and axing jobs, with huge caps on spending. This could all lead to a quicker price recovery.”

In the past year the price of oil has fallen from a peak of about $115/barrel in 3Q14 to less than $47 this month.

source: IHS Maritime 360