Page 49: of Maritime Logistics Professional Magazine (May/Jun 2018)

48 50

the limited liquidity in the market hindering price transpar- though earnings growth will remain steady rather than excit- ency. Taking the price discrepancy at face value however, we ing, we expect to see prices adjust further upwards in response would posit that buyers are in part paying an ‘illiquidity pre- to the improved fundamentals. mium’ while at the same time also hoping for greater upside on the earnings.

The second point relates more to the future outlook. The fact that second-hand prices and underlying values are generally

The Author James Frew aligned implies that, given earnings will broadly move side- is Director of Consultancy at MSI. He has ways for the next 18 months, it will be challenging for asset been covering the containership markets values to make much further headway over that period.

since 2007 and joined MSI in 2010. He regularly undertakes bespoke consultancy

This is where the other element of the pricing jigsaw comes and research projects for clients in the con- in, in the form of newbuilding prices. Although earnings tainership sector, for a range of liner com- growth through 2019 will be muted - and in our view that panies, tonnage providers, equipment les- will suppress further heavy investments in the sector as well sors, fnanciers and lawyers.Prior to joining MSI, James as asset value appreciation – the fundamentals around asset studied for an MSc in International Trade, Finance and pricing will continue to move upwards, dictated by the new-

Development at Barcelona Graduate School of Econom- building price. ics. Previously he worked as an analyst at Clarksons Re-

A further factor anticipated to suppress asset values in 2019 search, and has undergraduate qualifcations in History is the uncertainty surrounding the introduction of the 2020 and Economics, respectively from Oxford University and sulphur cap. 2020 will see these concerns resolved, and even Birkbeck College, London.

Chart 4: Net Present Values versus 10 year-old values www.maritimelogisticsprofessional.com 49

I