(19-08-2014, 06:40 PM)corydorus Wrote: [ -> ]Anyone knows how to read this BDI index. Dropped fromm 2008 high to current not even 10%. Does that mean rough gauge reduction of more than 90% in shipping volume since ?
BDI is meant for Dry Bulk shipping and not for Container shipping.
World Container Index is one possible guide for Containers shipping.
In short, if there are shipping rates for today, then there's also the expectation of tomorrow's rates.
Companies use forward contracts to lock in the availability of resources in the future at a set price. When shipping companies negotiate the rates of shipping materials/goods, they consider future expected supply and demand.
Cheers
I am still confuse after your explanation. LOL
Here's what i got.
http://www.learningmarkets.com/understan...dry-index/
The Baltic Dry Index typically increases in value as demand for commodities and raw goods increases and decreases in value as demand for commodities and raw goods decreases.
After watching the Video, BDI basically measure the cost of shipping raw materials. If so this means the cost of shipping raw materials have reduced 10 times since 2008. Which also means profits reduced by same amount for shippers. Really ???
(19-08-2014, 09:14 PM)corydorus Wrote: [ -> ]I am still confuse after your explanation. LOL
Here's what i got.
http://www.learningmarkets.com/understan...dry-index/
The Baltic Dry Index typically increases in value as demand for commodities and raw goods increases and decreases in value as demand for commodities and raw goods decreases.
After watching the Video, BDI basically measure the cost of shipping raw materials. If so this means the cost of shipping raw materials have reduced 10 times since 2008. Which also means profits reduced by same amount for shippers. Really ???
Its more than that. For simplicity, the charter/spot rate is dependent on ship supply and demands.
There far too many ships in the market now due to overbuilt in 2007 and recent years while global trade/ship demands is growing at a slower pace than ship growth rate that caused the collapse of charter rate/spot rate.
BDI is just the "trend" rate for the industry as a guide.
It doesn't means that when BDI drop 50%, profit is reduced in the same amount. Major bulk of ships cost is fuel.
For example, you can have a drop of charter rate by 20%, but if fuel cost is dropped by 50%, I believe shipping might be still profitable.
Hope this provide a better explanation.
NOL announced that it is considering the sale of its logistics business. Its logistics arm is the only profitable business in the company currently if im not wrong. Will the company be ploughing the proceeds back into its loss-making shipping arm after the sale? case of NOL throwing good money after bad?
Haiz..
(20-08-2014, 12:12 PM)Art or Science Wrote: [ -> ]NOL announced that it is considering the sale of its logistics business. Its logistics arm is the only profitable business in the company currently if im not wrong. Will the company be ploughing the proceeds back into its loss-making shipping arm after the sale? case of NOL throwing good money after bad?
Haiz..
I guess that explains the huge jump in price with volume yesterday.
Somebody must have found out about it and jumped in with a big order.
May be a repeat of like selling the profitable AET to Malaysians? When they tried to have a rights issues not too long ago, NOL had to withdraw due to unfavourable circumstances. And sold their NOL Head Office buildings instead. What else can they sell before ????
Nol has us$569m of liabilities to repay within this 10 months. Furthermore with potential interest rate hikes, it may not wise to be burdened with us$7.3 billion of total debt and non cancellable financial lease. Therefore a 750 mil sale seems feasible to tide the company as a rights issue at low price does not seem palatable
end up become a holding company... all assets sold... roughing out the low-turn in shipping...
The report on the announcement. If the disposal is via IPO, it will be interesting, depending on the detail...
(not vested)
NOL says sale of its logistics business ‘preliminary and exploratory in nature’
Neptune Orient Lines has responded to media reports that it is planning a sale of its logistics business.
NOL said in a statement to the SGX that it continually evaluates all available options to improve the strategic positioning and performance of its businesses.
These include considerations of a potential sale or initial public offering (IPO) and listing of its logistics business as a separate, stand-alone unit from NOL.
...
http://www.theedgesingapore.com/the-dail...ature.html
NOL always have ah gong behind it - another Temasek milestone after lifting stake from less than 50% to a subsidiary when shipping cycle was running real hot during the peak of last cycle.
Seems like Temasek like momentum investing in its long term strategic process...
Whatever lah, without Temasek, NOL is also another pile of scraps... better off keep things simple and invest in ks players like Godfather Ow
Odd Lots Vested
GG