Managing Financial Risks – Threats And Challenges

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Managing Financial Risks – Threats And Challenges

  1. 1. Managing Financial Risks – Threats and Challenges by Michael Parker Monday 19th September 2005
  2. 2. Threats and Challenges (SLEEPLESS NIGHTS FOR SHIPPING BANKERS)‏ <ul><li>Political Events </li></ul><ul><ul><li>War </li></ul></ul><ul><ul><li>Trade War </li></ul></ul><ul><li>Financial Crisis </li></ul><ul><ul><li>Loss of Confidence </li></ul></ul><ul><ul><li>Economic Impact </li></ul></ul><ul><li>Global Economic Situation </li></ul><ul><ul><li>Threat of Inflation </li></ul></ul><ul><ul><li>Risk of Recession </li></ul></ul><ul><li>Excess Supply of Credit </li></ul><ul><ul><li>Sources of Finance </li></ul></ul><ul><ul><li>Cheap Money </li></ul></ul><ul><li>Excess Supply of Ships </li></ul><ul><ul><li>Orderbook </li></ul></ul><ul><ul><li>New Shipyard Capacity </li></ul></ul>
  3. 3. GDP Growth %: US, Europe, Japan Source: Citigroup, Smith Barney
  4. 4. Inflation: US, Europe, Japan Source: Citigroup, Smith Barney
  5. 5. Have US Commodity Prices Reached Multi-century Lows? Source: BHP Billiton
  6. 6. Commodity Prices, 1987- 1Q05 Source: Citigroup, Smith Barney
  7. 7. China’s export growth rates are not new: Japan and Korea, 1957-1980 Source: Citigroup, Smith Barney
  8. 8. Asia- North American Routes: Rates and Supply/Demand Balance Index ($/TEU)‏ Source: Containerisation International
  9. 9. Transpacific Volumes in Perspective in ‘000 TEU, 1997-2006E
  10. 10. Average Container Rates, 1994-2006E (US$/TEU)‏
  11. 11. Container Vessel Average Newbuild Prices US$/TEU 1996-2005
  12. 12. Container Vessels Orderbook vs. Fleet Size Evolution, 1995-1Q05 Source: Clarksons
  13. 13. Container vessels by Number, and Average TEU per vessel Source: Clarksons
  14. 14. Tramp Ship Spot Rates ($/Day)‏
  15. 15. Dry Bulk Orderbook vs. Fleet Size Evolution, 1975-2006(F)‏ Source: Clarksons
  16. 16. Tankers Orderbook vs. Fleet Size Evolution, 1996-2005 Source: Clarksons
  17. 17. Average Annual Tanker Freight Rates: US$ per day Source: Clarksons
  18. 18. Global Syndicated Shipping Loans, High Yield and Public Equity 59 $11.3 $6.4 $16.0 $7.1 $18.5 $11.6 $0.4 $1.7 $1.3
  19. 19. Global Shipping Syndicated Loans
  20. 20. Threats and Challenges (SLEEPLESS NIGHTS FOR SHIPPING BANKERS)‏ <ul><li>Political Events </li></ul><ul><ul><li>War </li></ul></ul><ul><ul><li>Trade War </li></ul></ul><ul><li>Financial Crisis </li></ul><ul><ul><li>Loss of Confidence </li></ul></ul><ul><ul><li>Economic Impact </li></ul></ul><ul><li>Global Economic Situation </li></ul><ul><ul><li>Threat of Inflation </li></ul></ul><ul><ul><li>Risk of Recession </li></ul></ul><ul><li>Excess Supply of Credit </li></ul><ul><ul><li>Sources of Finance </li></ul></ul><ul><ul><li>Cheap Money </li></ul></ul><ul><li>Excess Supply of Ships </li></ul><ul><ul><li>Orderbook </li></ul></ul><ul><ul><li>New Shipyard Capacity </li></ul></ul>
  21. 21. Threats and Challenges <ul><li>Political Events </li></ul><ul><ul><li>War </li></ul></ul><ul><ul><li>Trade War </li></ul></ul><ul><li>Financial Crisis </li></ul><ul><ul><li>Loss of Confidence </li></ul></ul><ul><ul><li>Economic Impact </li></ul></ul><ul><li>Global Economic Situation </li></ul><ul><ul><li>Threat of Inflation </li></ul></ul><ul><ul><li>Risk of Recession </li></ul></ul><ul><li>Excess Supply of Credit </li></ul><ul><ul><li>Sources of Finance </li></ul></ul><ul><ul><li>Cheap Money </li></ul></ul><ul><li>Excess Supply of Ships </li></ul><ul><ul><li>Orderbook </li></ul></ul><ul><ul><li>New Shipyard Capacity </li></ul></ul>(A BETTER NIGHT’S SLEEP)‏
  22. 22. Threats and Challenges <ul><li>Financial Crisis </li></ul><ul><ul><li>Loss of Confidence </li></ul></ul><ul><ul><li>Economic Impact </li></ul></ul><ul><li>Global Economic Situation </li></ul><ul><ul><li>Threat of Inflation </li></ul></ul><ul><ul><li>Risk of Recession </li></ul></ul><ul><li>Excess Supply of Credit </li></ul><ul><ul><li>Sources of Finance </li></ul></ul><ul><ul><li>Cheap Money </li></ul></ul><ul><li>Excess Supply of Ships </li></ul><ul><ul><li>Orderbook </li></ul></ul><ul><ul><li>New Shipyard Capacity </li></ul></ul>(A BETTER NIGHT’S SLEEP)‏ <ul><li>Regulation </li></ul><ul><ul><li>Better but not perfect </li></ul></ul><ul><ul><li>Will increase </li></ul></ul>
  23. 23. Threats and Challenges <ul><li>Global Economic Situation </li></ul><ul><ul><li>Threat of Inflation </li></ul></ul><ul><ul><li>Risk of Recession </li></ul></ul><ul><li>Excess Supply of Credit </li></ul><ul><ul><li>Sources of Finance </li></ul></ul><ul><ul><li>Cheap Money </li></ul></ul><ul><li>Excess Supply of Ships </li></ul><ul><ul><li>Orderbook </li></ul></ul><ul><ul><li>New Shipyard Capacity </li></ul></ul>(A BETTER NIGHT’S SLEEP)‏ <ul><li>Regulation </li></ul><ul><ul><li>Better but not perfect </li></ul></ul><ul><ul><li>Will increase </li></ul></ul><ul><li>Transparency </li></ul><ul><ul><li>Physical </li></ul></ul><ul><ul><li>Financial </li></ul></ul>
  24. 24. Threats and Challenges <ul><li>Excess Supply of Credit </li></ul><ul><ul><li>Sources of Finance </li></ul></ul><ul><ul><li>Cheap Money </li></ul></ul><ul><li>Excess Supply of Ships </li></ul><ul><ul><li>Orderbook </li></ul></ul><ul><ul><li>New Shipyard Capacity </li></ul></ul>(A BETTER NIGHT’S SLEEP)‏ <ul><li>Regulation </li></ul><ul><ul><li>Better but not perfect </li></ul></ul><ul><ul><li>Will increase </li></ul></ul><ul><li>Transparency </li></ul><ul><ul><li>Physical </li></ul></ul><ul><ul><li>Financial </li></ul></ul><ul><li>Consolidation </li></ul><ul><ul><li>Physical </li></ul></ul><ul><ul><li>Financial </li></ul></ul>
  25. 25. Threats and Challenges <ul><li>Excess Supply of Credit </li></ul><ul><ul><li>Sources of Finance </li></ul></ul><ul><ul><li>Cheap Money </li></ul></ul>(A BETTER NIGHT’S SLEEP)‏ <ul><li>Regulation </li></ul><ul><ul><li>Better but not perfect </li></ul></ul><ul><ul><li>Will increase </li></ul></ul><ul><li>Transparency </li></ul><ul><ul><li>Physical </li></ul></ul><ul><ul><li>Financial </li></ul></ul><ul><li>Consolidation </li></ul><ul><ul><li>Physical </li></ul></ul><ul><ul><li>Financial </li></ul></ul><ul><li>Congestion </li></ul><ul><ul><li>Physical Barriers </li></ul></ul><ul><ul><li>Self-Control </li></ul></ul>
  26. 26. Threats and Challenges (A BETTER NIGHT’S SLEEP)‏ <ul><li>Regulation </li></ul><ul><ul><li>Better but not perfect </li></ul></ul><ul><ul><li>Will increase </li></ul></ul><ul><li>Transparency </li></ul><ul><ul><li>Physical </li></ul></ul><ul><ul><li>Financial </li></ul></ul><ul><li>Consolidation </li></ul><ul><ul><li>Physical </li></ul></ul><ul><ul><li>Financial </li></ul></ul><ul><li>Congestion </li></ul><ul><ul><li>Physical Barriers </li></ul></ul><ul><ul><li>Self-Control </li></ul></ul><ul><li>Globalisation </li></ul><ul><ul><li>A different World </li></ul></ul><ul><ul><li>A different Industry </li></ul></ul>

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