London: Asset players should sell VLCCs, buy capesizes and VLGCs and hold on to smaller containerships. That’s the advice of Richard Rivlin, chief executive of Seasure Shipbroking and online pricing vehicle, VesselsValue.
Rivlin makes these predictions to Maritime CEO on the back of a new type of ship valuation called Discounted Cash Flow (DCF) values, created by VesselsValue.com. This offers daily and historical income based valuations, estimating the total cash flows for the remaining trading life of the vessel. The mathematical model takes into account a large number of inputs, including anticipated charter rates, operating expenses, utilisation rate, commissions, inflation rates and discount rate.
“Guessing what is going to happen in the shipping industry over the next 12 months can be likened to gazing into a crystal ball,” Rivlin concedes, before adding: “But by using different valuation methods, there are ways to predict where shipowners should place their money in today’s market.”
In the secondhand market, Rivlin is adamant that large bulkers still offer the greatest potential in terms of asset play but uncertainty in future earnings remains a “major concern”.
Coming up for VesselsValue.com, Rivlin says the plan is to roll out Book and Replacement Values for each individual vessel.
“Adding these to our Market, Demo and DCF valuations, VesselsValue.com will soon be computing 175,000 valuations every single day,” says Rivlin.