August
2007
Demand For Cargo Vessels Prompts Setup Of Shipping
Funds
Amid strong growth in the marine transport industry, more companies are
establishing shipping funds, whose combined size now exceeds 100 billion
yen. A shipping fund, which uses money garnered from investors to buy
vessels from marine transport companies, earns income by leasing the craft
to other shipping firms, or gains freight charge income through long-term
contracts previously concluded for the ships. The funds are attracting
interest from life insurance companies and other institutional investors
as a new type of investment vehicle. Investment advisory firm Anchor Ship
Investment Co. recently established a shipping fund that purchases vessels
such as large tankers and container ships that cost over 10 billion yen.
Mitsui & Co. set up in April a 35 billion yen shipping fund, which
started operations and purchased a vessel. GCM Ltd., which manages real
estate funds, also entered the business by forming a shipping fund with
the aim of raising 10 billion yen. Demand for cargo ships has been boosted
by economic growth in China and other emerging countries. Freight rates
for tramp ships have tripled from a year earlier. With the Baltic Dry
Index, a benchmark for freight rates, surpassing the 7,000 mark earlier
this month for the first time ever, an executive of a major shipping firm
said, "Shipping rates will remain strong at least until 2012."
(The Nihon Keizai Shimbun, August 27, 2007)
July
2007
Profits Soar At Big 3 Shippers On Strong Demand, Weak
Yen
Profits jumped at Japan's three major shipping companies in the April-June
quarter, fueled by such factors as rising marine transport demand amid the
global economic boom and a weaker-than-expected yen. Nippon Yusen KK saw
its group pretax profit surge about 80% year on year to roughly 40 billion
yen for the period, on a 10% sales rise to 570 billion yen. Mitsui O.S.K.
Lines Ltd. booked a 80% increase in group pretax profit to 62 billion yen,
with sales climbing 20% to 450 billion yen. Pretax profit at Kawasaki
Kisen Kaisha Ltd. soared 180% to 28 billion yen. The sharp profit growth
is attributed chiefly to a rapid increase in demand for shipping iron ore
as China significantly boosted imports of the material from Brazil and
elsewhere as it prepares for next summer's Beijing Olympic Games. This
strong demand pushed transportation costs on midsize and large bulk ships
to record levels. (The Nihon Keizai Shimbun, July 25, 2007)
