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No longer a Seaspan bear

No longer a Seaspan bear

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Container shipowners have been through a very rough patch. Danaos has been under a microscope among listed shares. And Seaspan has been the bigger disappointment given its leadership position. Rickmers Group has been the disaster. More distressing perhaps is that German banks (government?) are expected to bail out Rickmers in some manner eventually, even though banks have just refused a restructuring of Rickmers Maritime!

So it was no wonder to see Seaspan get taken down to its sold off lows again last week – even after slashing the dividend distribution some 67%. Many of us have not been surprised by any of this.

But things are changing a little. Dry bulk vessel values were marked up last week by Clarksons. A

nd in the market now there is talk of many 10,000 teu ships getting chartered out (even some remaining 4,000 teu ships may be seeing some action). If this holds up, charter rates could tick up some.

So Seaspan was a deep concern of mine running up to the recent results. Also, I would have preferred an even steeper cut in the distributions. But there were some green sprouts coming out of Seaspan’s efforts. Moreover, we have to start thinking, if Seaspan is one of the industry survivors, then where will a valuation floor settle in if vessel prices start to inch up. I am no longer a bear on Seaspan. There are clear risks, but the opportunities may start to outweigh the risks here.

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Charles de Trenck

Charles de Trenck began his study of China in 1980 and eventually got in on the ground floor in China's equities boom of the early 1990s through work in Hong Kong and China shares. By the mid-90s he shifted to containerised trade, ports and shipping, eventually leading Citi to #1 rankings in Asia transport equities.

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