Attractiveness of container shipping as an investment asset class - perspective from an equity investor with investment horizon of 5 years

• Main Author: Ong, Jasmine
• Other Authors: -
• Format: Final Year Project
• Language: English
• Published: Nanyang Technological University 2022
• Subjects: Engineering::Maritime studies
• Online Access: https://hdl.handle.net/10356/163695
• Institution: Nanyang Technological University

This volume is the third of three volumes focusing on analysing the attractiveness of investing in private container shipping companies. This study analyses the risks against the returns of an equity investor looking to acquire vessels on behalf of private container shipping companies. The returns are valuated via the Discounted Cashflow model. This determines the net present value of the vessel, taking into account the future expected cash flows of operating the vessel under long-term time charter over a period of five years. Different scenarios were run with varying time-charter rates to analyse its effect on the NPV generated. The overall results show that negative NPV were generated for both newbuild and second-hand vessels, which thus indicates that the revenue earned from the time charter is insufficient to cover the costs, at least for the next five years. Hence, from the perspective of a private equity investor, the container shipping market is unattractive as an investment asset class for the next five years.