Beta comparisons across industries—a Water transportation industry perspective

This paper undertakes a comparative analysis of the stock market perception of risk in US listed water transportation companies and seven other main sectors, air transportation; rail transportation; trucks; electricity; gas; petroleum refining; and real estate over the period July 1984-June 1995. This is done by employing the Capital Asset Pricing Model (CAPM) to model the stock returns of each industry and hence compare their betas (systematic risk). Multiequation Regression Models are used for estimation. The findings suggest that the water transportation industry exhibits significantly lower market risk than the average stock and the rail transportation industry, significantly higher systematic risk than the real estate industry, while its systematic risk is insignificantly different from the rest of the industries. These results are useful to investors basing their decisions on relative market exposures to risk in different industries.     

International comparison of market risks across shipping-related industries

This paper compares the behaviour of shipping and shipping-related company stock returns to reveal whether systematic risk differs from the average in the market and across sub-sectors of the maritime industry. Following an extensive collection of information through a postal questionnaire survey, 108 publicly listed shipping and shipping-related companies, across stock exchanges of the world, are classified by sector according to their core business activity. The Capital Asset Pricing Model (CAPM) is employed for the period 1996-1999 to model stock returns and measure sector βs (systematic risk). Stock returns over the period are mostly negative. The systematic risks of the Drilling and Offshore sectors are significantly higher than those of all other sectors, but are not different from each other. There is no significant difference between the systematic risks of the Bulk, Tanker, Container and Ferry sectors. The systematic risk of the Cruise sector lies somewhere between these two groups. There is no difference in the systematic risk of companies that diversified within shipping or shipping-related industries when compared to companies that diversified in other areas. Over all companies in the sample, βis lower than the market average, and so are the βs of the Ferry, Tanker, Bulk, Container and Yard sectors. Only the βof the Drilling sector is statistically higher than one, while the Cruise, Diversified and Offshore sectors are statistically one.     

A cross-section analysis of stock returns: The case of shipping firms

This paper undertakes an analysis of the determinants of the cross-section of expected stock returns of 19 shipping companies listed in the US, Norway, Stockholm and London. Various factors, including company stock market beta, divided yield, and financial leverage have been identified in the finance literature as determinants of share price performance. We capitalize on these findings and add one more industry specific factor, the average age of the company's fleet, to quantitatively analyse the determinants of the performance of shipping shock returns. We use the Fama-MacBeth methodology to empirically test whether the five factors above have a significant effect on shipping stocks' performance. Our results indicate that the industry specific factor (the average age of the fleet) plus financial leverage, are significant in explaining shipping stocks' returns, wheras the stock market beta and the dividend yield are far less significant.     

Asset allocation and value at risk in shipping equity portfolios

This study employs alternative dynamic volatility models to investigate the risk and return characteristics of a carefully selected sample of shipping stocks, in order to enhance asset allocation opportunities. As private and institutional investors are in search of alternative style investments, the assessment of stock volatility is a critical issue for efficient asset allocation, dynamic portfolio management and firm valuation. The empirical findings indicate a highly volatile profile for shipping stock returns, in line with respective (tanker and dry bulk) earnings. Sectoral and company fundamentals may affect shipping stock volatility, which is found to be sensitive to asymmetric shocks. The results support high portfolio returns for shipping stock portfolios that appear to be superior to standard market benchmarks but are associated with higher risk level.     

The relative efficiency and financial risk assessment of shipping companies

Since shipping companies are highly competitive, we ask whether financial risk assessment tools impact company performance and, therefore competitiveness and efficiency. Stochastic Frontier Analysis (SFA) is used in the evaluation. Based on distinct features of the risk-return relationship, three cargo segments in the shipping industry are studied—dry bulk, liquid bulk, and containerized cargo. The influence of the risk assessment indicators on market and operational efficiency is subsequently determined using a panel regression to determine whether different asset allocation and risk management techniques improve the performance of shipping companies. In this analysis, 79 international shipping companies listed in Bloomberg Shipping Indices are included in the data collected from Thomson One for the period of 2001–2010. Efficiency estimation from the SFA shows that containerized cargo firms have better performance in both market and operating efficiencies. Operating efficiency performance is achieved by lowering liquidity. Market efficiency is improved by well-managed leverage level.     

Investor herding behaviour in globally listed shipping stocks

ABSTRACT

This study undertakes one of the first empirical attempts to investigate and contribute a set of innovative findings to investor herding behavior and herding spillover effects in globally listed shipping company stock returns. Distinguishing between OECD and Non-OECD markets, herding behavior is tested on a diversified set of shipping companies traded in international equity markets, over different business cycle phases, financial crises, and external shocks. A set of dynamic models, well established in the relevant behavioral finance literature, is implemented. Empirical evidence indicates investor herding behavior in shipping stock returns and herding spillover effects between different shipping sectors, albeit not robust in all cases. These challenging findings can have a material impact on efficient investment and financing decisions of shipping market players.     

The empirical evidence of the leverage effect on volatility in international bulk shipping market

This paper mainly applies Nelson's EGARCH (Exponentially Generalized Autoregressive Conditional Heteroskedasticity) model to investigate the leverage effect in the presence of the international bulk shipping market. The daily return of three different types of bulk vessel in the sampling period selected has been examined. We find that all return series show a significantly negative relation in terms of return and volatility and the leverage effect on volatility is more significant in market downward movement than in market upward movement under the same magnitude of innovation, in addition, the larger vessels have much more leverage effect than smaller vessels contemporaneously. Therefore, it seems to be an inherent nature in the international bulk shipping market that the phenomenon of an asymmetric impact between past innovations and current volatility. This result from the investigation may provide investors with an insight into real characteristics of price return volatility, it is useful for investors to pre-arrange their portfolios of assets, risk management e.g. enabling them to achieve a reduction of investment risk and an increase of operation performance in profit gain.     

Risk perception affecting the performance of shipping companies: the moderating effect of China and Korea

Risks in the shipping industry have been highlighted and have attracted significant attention, especially following the bankruptcy of Hanjin in 2017. Due to the decrease in container volume, the business environment for large shipping companies in China has deteriorated. Therefore, major large shipping companies have implemented mixed ownership reform, which provides more opportunities for large Korean shipping companies to enter the Chinese shipping industry. This study first identifies risk perception, specifically focusing on the moderating effect of Chinese and Korean shipping companies, and then demonstrates the impact of these risks on shipping company performance. The results show that market, operational, and technical risks have a negative influence on Chinese shipping companies, whereas market, policy, financial, operations, and technical risks have a negative influence on Korean shipping companies. This study contributes to the fundamental understanding of the effect of risk perception on performance among shipping companies in both countries and calls for further research on risk management plans based on the risk factors identified herein. On a practical level, this study provides an important reference for operators and investors who seek to enter strategic alliances or joint venture in Chinese shipping industry.     

Perceptions of foreign exchange rate risk in the shipping industry

This is an analysis of the impact of exchange rate risk on the performance of major shipping companies from two important maritime nations, Japan and Norway. For the shipping industry, such risk is exacerbated by freight rates fixed in US dollars which must then be converted into numerous other currencies. The appreciation of the Yen against the US dollar has been such that Japanese companies have been impelled to insulate themselves from exchange rate movements by natural hedging. For Norway, where fluctuations of the Krone against the US dollar have been less dramatic, exposure has been maintained, allowing an element of speculation. In both cases the market indicates that exchange rate risk is a significant factor in the determination of corporate performance.     

Perceptions of foreign exchange rate risk in the shipping industry

This is an analysis of the impact of exchange rate risk on the performance of major shipping companies from two important maritime nations, Japan and Norway. For the shipping industry, such risk is exacerbated by freight rates fixed in US dollars which must then be converted into numerous other currencies. The appreciation of the Yen against the US dollar has been such that Japanese companies have been impelled to insulate themselves from exchange rate movements by natural hedging. For Norway, where fluctuations of the Krone against the US dollar have been less dramatic, exposure has been maintained, allowing an element of speculation. In both cases the market indicates that exchange rate risk is a significant factor in the determination of corporate performance.     

Results so far and prospects of Kazakhstan passenger rail franchising

From 1991 till 2004 passenger rail transportation in Kazakhstan was organized by a public company without financial contribution from the state budget. As in any post-Soviet country losses from passenger sector in the integrated rail company were covered at the expense of the freight transportations. From 2005 the Government is trying to introduce competition in passenger rail industry by competitive tendering rights to operate on particular route and providing subsidies.This paper reviews the Kazakhstan passenger rail franchising policy from statement and implementation with analysis of results so far. To get sense about the current policy’s perception survey among managers of the government bodies and railway companies had been performed. It indicates respondents’ opinion about main concerns and suggestions for improvement in passenger rail industry. According to provided analysis there are opportunities for improvements in operation of public and private companies as well as in the Government policy.     

Price and volume dynamics in second-hand dry bulk and tanker shipping markets

The relationship between trading volume, prices and return volatility is thoroughly investigated in different second-hand dry bulk and tanker market segments. The objective is to gain fruitful insight on the sale and purchase market dynamics, and the sensitivity of vessel price movements following the arrival of new information signals in the shipping markets. Contemporaneous relationships are identified between returns and volume, particularly in the markets of handysize and panamax bulks as well as of handysize and aframax tankers. Price changes are found to have an impact on trading volume indicating that expectations to higher capital gains induce increases in trading activity. Volume appears to have a negative impact on the volatility of price changes mainly in the dry bulk market; this may be due to thin trading, limited transaction transparency and absence of vessel price quotes. The empirical findings can contribute to a better understanding of shipping markets' microstructure and price volatility dynamics by market participants. This, in turn, can be useful for investors who construct their portfolios of real assets with a view to attain superior capital gains, controlling for the underlying investment risk.     

Price and volume dynamics in second-hand dry bulk and tanker shipping markets

The relationship between trading volume, prices and return volatility is thoroughly investigated in different second-hand dry bulk and tanker market segments. The objective is to gain fruitful insight on the sale and purchase market dynamics, and the sensitivity of vessel price movements following the arrival of new information signals in the shipping markets. Contemporaneous relationships are identified between returns and volume, particularly in the markets of handysize and panamax bulks as well as of handysize and aframax tankers. Price changes are found to have an impact on trading volume indicating that expectations to higher capital gains induce increases in trading activity. Volume appears to have a negative impact on the volatility of price changes mainly in the dry bulk market; this may be due to thin trading, limited transaction transparency and absence of vessel price quotes. The empirical findings can contribute to a better understanding of shipping markets’ microstructure and price volatility dynamics by market participants. This, in turn, can be useful for investors who construct their portfolios of real assets with a view to attain superior capital gains, controlling for the underlying investment risk.     

Initial public offerings in the port industry: exploring the determinants of underpricing

The capital-intensive nature of the port industry and the long payback period of port investments traditionally determine high financial needs for operating the business. Due to the growing financial requirements for developing greenfield mega-projects and feeding international terminal operators’ overseas expansion, equity markets are expected to extend their role in promoting the industry. In this perspective, the underpricing phenomenon, which represents a direct cost for the issuer during initial public offering (IPO) and discourages companies from going public, is neglected by port literature. The paper explores the antecedents of IPO underpricing in ports. Building upon extant finance and port literature, firm characteristics, transaction features, and country-specific variables are tested as determinants of IPOs’ initial returns. For the aim of this study, 58 port-related IPOs taking place on international stock exchanges are examined, and ordinary least squares regression analysis is performed. The study offers unprecedented understandings of the phenomenon and supports port managers in facing financial challenges. Before launching the IPO, financial executives are invited to carefully identify time-window opportunities, and to monitor underwriters’ reputation when selecting financial partners. Findings bring insights for policymakers, as the public listing of port companies emerges a viable option for implementing port reform.     

Analyzing ship investment behaviour in liner shipping

This study analyzes capacity expansion and ship choice decisions. Theoretically, we derive the probability of capacity expansion as a function of market and company attributes and characterize the impacts of these factors on expansion decisions. Empirically, we analyze ship investment and ship choice behaviour using binary choice and nested logit models based on ship investment data from major liner shipping companies over the period 1999 to 2009. Most expansion decisions are found to be market-driven, and large companies expand to maintain their market shares. In terms of ship selection, statistical results support the assumption that shipping companies decide on a new order or second-hand purchase before considering the ship size. Also, new orders are preferable to second-hand purchases. For new orders, the preference increases with ship size, and decreases with shipbuilding length and demand growth rate. For all ship types, the preference increases with a high and stable time-charter rate. For second-hand ships, handysize is the most preferable size. The substitution of new orders and second-hand purchases is possible, but not symmetrical.     

An analysis of freight rate volatility in dry bulk shipping markets

The world bulk shipping market has been in a peak period since 2003, and this has lasted an incredibly long time considering that the markets are much more complex than before. This paper investigates the characteristics of volatility in dry bulk freight rates of different vessel sizes (capesize, panamax and handysize). The daily returns of freight rate indices of three different types of bulk vessel in the sample period have been examined. The sample period ran from 1 March 1999 to 23 December 2005, and applying the GARCH (generalized auto regressive conditional heteroskedasticity) model showed that the shocks will not decrease but have the tendency to strengthen for all the daily return series. Further, external shocks on the market have a different magnitude of influence on volatility in different types of vessels due to their distinct flexibility. To examine the asymmetric characters of daily return volatility in different bulk shipping sectors and different market conditions, the sample was divided into two periods: one is from 1 March 1999 to 31 December 2002, the other is from 1 January 2003 to 23 December 2005; the EGARCH (exponential generalized auto regressive conditional heteroskedasticity) model was then applied to investigate the asymmetric impact between past innovations and current volatility. The results show that the asymmetric characters are distinct for different vessel size segments and different market conditions. The reasons for the results are discussed and it is considered that the main reasons may be the different flexibility and different commodity transport on different routes. The results from this investigation will be useful for the operators and investors in the dry bulk shipping market to increase profitability and reduce investment risk.     

Norwegian shipping: measuring foreign exchange risk

The primary aim here is an attempt to measure the impact of foreign exchange movements on the operating results of the shipping industry. The issue arises from the imposition of a volatile foreign exchange market on a freight market structure which fixes revenues in US dollars. Despite attempts to shift costs into dollars, some other currency liabilities still remain, making exposure to exchange rate fluctuations inevitable. The contemporary experience of the Norwegian industry is used to analyse the cost structure in terms of currency denomination, the volatility in the real Kroner/US dollar exchange rate, and the sensitivity of the operating results to these fluctuations. This serves to highlight the commercial vulnerability of shipping companies. Exposure can be seen in a positive or negative light depending on the direction of movement in the exchange rate. Operating profits can rise and fall dramatically simply because of these exchange rate movements.     

Themes and tools of maritime transport research during 2000-2014

This study examines how maritime transport has been researched through a comprehensive review of papers published in 19 transportation journals over the period 2000–2014. Systematic investigation shows that Maritime Policy & Management plays a prominent role in publishing maritime transport research. At the same time, ‘shipping’ is a dominant research area, with ‘port management, service, performance, efficiency and competitiveness’; ‘shipping market, industry, freight rate and economic impact’; and ‘terminal studies’ as the most popular topics. Nevertheless, few efforts have investigated ‘shipping finance’; ‘shipping service’; or ‘port risk and security.’ Since 2000, the use of quantitative analysis techniques has steadily increased in maritime transport to help participants make decisions scientifically. We here present the major data analysis techniques and highlight some limitations regarding their application. Thus, we provide a better understanding of how maritime transport research has been undertaken in a quantitative manner.     

沿海干散货运输市场预测及建议

通过数据详尽分析2009年沿海干散货运输市场的水运形势,同时根据电力行业、钢铁行业的发展对未来2-3年中国煤炭需求、金属矿石需求和干散货运输市场进行预测,建议重视集疏运系统建设,签订长期协议,提高合同兑现率。     

) and annual payments (a) is a follows:

Modern management techniques are slowly but surely being introduced aslo in shipping management. Large sections of the industry practises strategic management at various levels in the firm. This paper outlines a method for deciding chartering strategies in the international bulk shipping industry. A well known risk/return model is tailored to transportation contracts in the shipping industry. The model delineates a set of optimally defined transportation contracts that may serve as a basis for the shipowner's strategic decisions. The strategies and elements of strategies suggested by the model have historically been practised by a number of successful shipowners. An important conclusion of the paper is that no second best problems exists and hence movement towarts the optimal solution is advocated even if such a solution cannot or will not be reached. Additionally, the paper provides an organized way of crafting, analysing and applying chartering strategies where the outcomes can be clearly defined and analysed based on well known statistical concepts and theories.