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Buy Secondhand Ships Now?

Drewry's reasons the time is soon to invest in used ships for profit To be trite, every cloud has a silver lining, and the stormy shipping market crisis' shining beacon appears to be strong investment opportunities in secondhand ships. In its latest report, "Secondhand Ships: Investment Potential and Value for Money," Drewry's argues that "adversity provides opportunity... therefore, acquisitions made now could prove to be bargains." Drewry believes that 1999 and 2000 should be interesting and active years for the secondhand ship market.

Drewry's analysis of market potential through to 2003 in the mainstream markets concludes that the highest investment returns could come from Panamax and Handymax bulk carriers but most classes of bulk carriers and tankers could cross a 10 percent IRR "hurdle rate" at some point over the period — the crucial factor being timing.

Although newbuild prices have remained in check for years, the shipping industry maxim that there is no money to be made in newbuilds still seems pervasive. Money is often made, however, in the use of secondhand ships, and the secondhand market has become volatile and, currently, there seems to be no shortage of potential buyers when a vessel on offer is regarded as "quality tonnage." The ability to realize the potential of these acquisitions will depend on the pace and extent of market recovery over the next two to four years. For the moment, however, Drewry feels that the key views are those of potential sellers do they want to/are they able to tough it out? Will banks put pressure on owners to liquidate assets? Another maxim in shipping circles is that the decision to sell is often far harder to take than the decision to buy. Another key aspect taxing minds in the marketplace —- and especially potential buyers — is, what is a ship worth? As "Secondhand Ships" points out, a lot depends on who is asking the question and why.

"Secondhand Ships," sees other issues that are changing the marketplace. While much of the practicality of buying and selling ships follows established, "tried and trusted" methods and procedures, the world is changing and new generations may want to embrace new methods — even if the old and arcane retain many merits.

The changing balance in fleet owner nationalities may force the adoption of August, 1999 local practices and require centers of broking to relocate. Equally, the advancements, opportunities and challenges posed by the IT revolution could also see the conduct of S&P transactions undergoing reform in the new millennium. Most observers of the secondhand market have cognitive impressions of buyer and seller trends, particularly by nationality. However, this is not always borne out by the facts. Drewry's research has found that, although buyer patterns in the mainstream dry bulk and tanker sectors show an expected Greek dominance, seller patterns do not present a particularly clear cut picture. The mainstream markets are consolidating and Drewry asks the question whether a mixed selling pattern alongside a betterdefined buying pattern is a sign of this.

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Ship Simulators History

Bulk Carrier Construction
Bulk Carrier Market Weakening
Citing Strong Financial Performance in 1995, Carnival Raises Dividend
COMSAT Offers Cruise lines Communications Concession
Cruise Shipping
Eletson Signs letter Of Intent To Build Tankers At Newport News
Export Business Brightens Future
Germanischer Lloyd: R&D Helps Pave The Way For Safety
Global Electronic Communications Speed Ship Financing Process
Griffin Expands Contalnership Fleet
Griffin Orders New Containership
High-Yield Shipping Bonds: A letter Mouse-Trap, Or Just A letter Trap
High-Yield Skipping Bonds: A Better Mouse-Trap, Or Just A Better Trap?
HNS Wins Contract To Renovate American Hawaii Cruise Ship
LR: A Register For The Millennium
MarAd Sets Strict Conditions For APL Foreign-Flag Activities
MSC Celebrates 50 Years
Multi-Purpose Cargo Ships And Their Future Markets
Navy Plans System To Counter Shallow Water Submarine Threat In Regional Areas
Newport News Christens Sealift Ship On Independence Day
Newport News signs letter Of Intent For live DooNe Engle Tankers
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RRF Impresses In Haiti
Simulation Training And Research Center To Open In Seattle In April
Step To The Head Of The Class
Technology, R&D: Charting A Steady Course For Cleaner Seas
The End Of The Grandfather Clause? Implications For Owners, Builders & Suppliers
Ugland & Totem Merge Ship Management Operations
Up & Down: Sweet Music To MacGregor s Ears
USCG Uses 3Com Technology To Launch Virtual Private Networks
 
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