Scenario analysis for shipping investment strategies : tanker sector

• Main Author: Cao, Wenfei
• Other Authors: Lam Siu Lee, Jasmine
• Format: Final Year Project
• Language: English
• Published: 2019
• Subjects: DRNTU::Engineering::Maritime studies::Maritime management and business
• Online Access: http://hdl.handle.net/10356/78582
• Institution: Nanyang Technological University

Given the volatility of the shipping market and the huge amounts of capital involved in shipping investment, deploying appropriate investment strategies are crucial for the sustainable development of shipping companies. This paper extended the application of scenario analysis in the shipping area through formulating plausible scenarios and providing references for corresponding investment strategies for the shipping companies. With a focus on the tanker sector, a four-stage scenario analysis framework was developed based on literature review. Annual reports of a decade from 2008 to 2017 were collected from five top tanker companies for developing and comparing their investment patterns of newbuilding, selling, purchasing. Their investment strategies were further analyzed with their financial performance and market condition. A 2×2 scenario model with two uncertainties was then constructed, and investment strategies were formulated for each of the four scenarios. Results showed that variations of uncertainties largely influence the investment strategies in different scenarios, and this scenario analysis is practically applicable. Due to the distinctive natures of shipping companies, the suggested investment strategies are supposed to be selected and amended for optimized practice. As for further research, recommendations are proposed on enhancing the ability to accommodate the scenario model to various contexts.