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Equity Research Analyst, Maritime sector, Drewry Maritime Financial Research

Ankush Kathuria CFA, FRM

Equity Research Analyst, Maritime sector

Maritime Sector, Equity & Credit Research

Drewry Maritime Financial Research

With no ties to other players in the shipping, finance or banking world, we provide a uniquely impartial view of the markets and companies we cover. Our parent organization, Drewry is a leading independent provider of research services to the maritime and shipping industry, employing over 100 professionals across an international network of offices in London, Delhi, Singapore and Shanghai. Combining our market-leading resources with seasoned sector expertise DFRS offers a highly differentiated and comprehensive range of investment and financial research services to lenders and prospective investors in publicly listed maritime and shipping companies. The full service of reports, supporting resources and sector orientated webinars provides our clients with the most complete picture of the organisations under coverage as is possible. We have been charting and analysing the world’s maritime markets for more than 40 years. This unrivalled intelligence and understanding provides the foundation of our research service. Our analysts have access to one of the most up-to-date, comprehensive and reliable sources of market insight and research data available today. We look at globally listed companies within the following sectors: Port Operators, Container Shipping, Container Manufacturing & Leasing, LNG Shipping, Dry Bulk Shipping and Tanker Shipping. Combine in-depth sector expertise with financial analysis focusing on over 50 stocks globally.

Thematic (Sector/Industry)

<ul><li>After a strong freight rate rally in 2017, which also rubbed on stock prices, we have seen a significant correction in the recent past as the BDI has come down sharply from 1,743 in December to the current 1,089. The underlying reason for this revision is the seasonal weakness, owing to muted industrial activity in China. The moderation in commodity demand was exacerbated by the lag effect of steel production cuts announced by the Chinese government in October 2017. </li><li>Dry bulk stocks have witnessed outsized gains in 2017, but have corrected sharply amid the global rout in capital markets and the recent correction in dry bulk rates. We believe this provides an opportunity for investors to enter frontline stocks with no liquidity concerns. We prefer Star Bulk Carriers Corp (SBLK US) and Scorpio Bulkers (SALT US) as both have a well-balanced charter coverage, which will support earnings in first-quarter 2018, and are available at attractive valuations.</li></ul>

After a strong freight rate rally in 2017, which also rubbed on stock prices, we have seen a significant correction in the recent past as the BDI has come down sharply from 1,743 in December to the current 1,089. The underlying reason for this revision is the seasonal weakness, owing to muted industrial activity in China. The moderation in commodity demand was exacerbated by the lag effect of steel production cuts announced by the Chinese government in October 2017. Dry bulk stocks have witnessed outsized gains in 2017, but have corrected sharply amid the global rout in capital markets and the recent correction in dry bulk rates. We believe this provides an opportunity for investors to enter frontline stocks with no liquidity concerns. We prefer Star Bulk Carriers Corp (SBLK US) and Scorpio Bulkers (SALT US) as both have a well-balanced charter coverage, which will support earnings in first-quarter 2018, and are available at attractive valuations.

Dry Bulk Shipping - Recovery to Normalise in 2018