Posted by
whoyg1781 on Tuesday, November 03, 2009 10:17:31 PM
Echoing a recent report published by credit rating agency Standard
& Poor's (S&P), speakers at the Marine Finance Forum in New
York – representing the commercial banking, investment banking and
legal sectors – debated whether financiers, vessel operators, owners
and shipyards are in denial over the current economic crisis, refusing
to coral necklace take needed – albeit painful – measures to put their respective
houses in order.
The S&P report addressing the North American transportation
market, although focusing mostly on the air, rail and trucking modes,
presented the same conclusions reached by maritime financiers.
A team led by Philip Baggaley, managing director and senior airline
credit analyst at S&P, offers in the report the view that demand
has stopped falling and a glimmer of hope for recovery can be found in
some sectors, but that the "ride up may be slow and unsteady".
S&P notes in the report that, for airlines - the mode whose
performance has most closely mirrored that of shipping - the focus is
on liquidity, that is, having enough cash to meet obligations.
Unresolved battle
With the maritime mode, cashflow is paramount. Speaking at the
forum, Chris Weyers, managing director at FBR Capital Markets, points
to "an unresolved battle among shipowners, banks and shipyards".
The backdrop of oversupplied maritime markets in each of the
drybulk, tanker and container sectors, provides context to the denial
theme.
Quite simply, more bad news is likely to pearl strand wholesale be on the way for industry
cashflow generation. The bank market is limited in what it can provide
and, therefore, asset prices must move lower for the markets to
properly clear.