1. INTRODUCTION
In this project, it is analyzed a potential investment in a second- hand vessel. Assuming we are an investor who is willing to buy a Panamax bulk carrier. In the beginning we will present some general information regarding investment and motives, S&P market, the price and the factors which determine it and characteristics of investment in ships. Secondly, we will make a presentation/comparison of advantages and disadvantages of investing in new-buildings or second- hand vessels and present extensively the Panamax bulk carrier market. Then we will analyze the most important factor regarding an S&P, i.e. the timing and we will present the risks regarding the investment and finally we will make a presentation and comparison of …show more content…
The participants are primarily shipowners and possibly new entrants in the ship-owning industry who retain third parties, the S&P brokers, to identify suitable tonnage for their requirements, negotiate price and other elements and close the deal. The S&P market is very active with a large number of ships changing hands every year.
So the question is: why buy a ship? As in any asset acquisition, the key motive when acquiring a shipping asset is return generation. Shipowners acquire assets with the expectation that the returns will compensate them for the underlying risk. The return from an investment in a shipping asset is typically generated through two ways: a) the asset appreciation, buy low- sell high principle, b) the profitable operations, meaning that some shipowners acquire shipping assets with the intention of maintaining ownership for the long- run, generating returns through their …show more content…
To begin, freight rates are the primary factor which influences the ship prices. The ups and downs in the freight market are reflected on the S&P market. When the freight rates are high the prices of the vessels in the S&P market are rising. This correlation is used as a base on valuing the ships using the gross earning method. Generally speaking, when the market falls, the earnings multiple tends to increase, and when it rises the multiple falls, but there can be no firm rules because it all depends on sentiments and
In this project, it is analyzed a potential investment in a second- hand vessel. Assuming we are an investor who is willing to buy a Panamax bulk carrier. In the beginning we will present some general information regarding investment and motives, S&P market, the price and the factors which determine it and characteristics of investment in ships. Secondly, we will make a presentation/comparison of advantages and disadvantages of investing in new-buildings or second- hand vessels and present extensively the Panamax bulk carrier market. Then we will analyze the most important factor regarding an S&P, i.e. the timing and we will present the risks regarding the investment and finally we will make a presentation and comparison of …show more content…
The participants are primarily shipowners and possibly new entrants in the ship-owning industry who retain third parties, the S&P brokers, to identify suitable tonnage for their requirements, negotiate price and other elements and close the deal. The S&P market is very active with a large number of ships changing hands every year.
So the question is: why buy a ship? As in any asset acquisition, the key motive when acquiring a shipping asset is return generation. Shipowners acquire assets with the expectation that the returns will compensate them for the underlying risk. The return from an investment in a shipping asset is typically generated through two ways: a) the asset appreciation, buy low- sell high principle, b) the profitable operations, meaning that some shipowners acquire shipping assets with the intention of maintaining ownership for the long- run, generating returns through their …show more content…
To begin, freight rates are the primary factor which influences the ship prices. The ups and downs in the freight market are reflected on the S&P market. When the freight rates are high the prices of the vessels in the S&P market are rising. This correlation is used as a base on valuing the ships using the gross earning method. Generally speaking, when the market falls, the earnings multiple tends to increase, and when it rises the multiple falls, but there can be no firm rules because it all depends on sentiments and