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NOTOS NEWS | MARITIME INDICES OCTOBER 2019

What a month – nearly 10% gains on average for shipping stocks. But the outlook seems to be more and more fragile. It is not only the ongoing trade dispute, there is also a mounting uncertainty about the right concept for complying with future environmental regulations. 

RED-HOT TANKER MARKETS
October was a fabulous month for shipping stocks. Our broad market index rose by 9.3% to 1,063.4 index points. The tanker markets even gained more than 18% in just one month. This was underpinned by a sudden and large increase in spot markets. Brokers reported that some voyages were settled above USD 300k per day for VLCCs.

However, the spot market is fast-paced and volatile. At the time of writing this report, spot rates have dropped, again.

 

LNG COMPANIES UNDER PRESSURE
It seems that investors show a sustainable distrust and lack of confidence in the LNG sector. The sector is underperforming since the beginning of the year. This is maybe driven by a remarkable soft spot market, but there are maybe other reasons, as well.

Gaslog’s Peter Livanos recently pointed out that the company would refrain from new orderings due to rising uncertainties about future environmental regulations. 

LINER COMPANIES SHINE
Economists would argue that liner companies should suffer the most from a long-lasting trade war between China and the US. Furthermore, one would expect some softening in rates and values due to seasonal trade patterns. But on the contrary, liner companies seem to shake these concerns lightly off. We wonder how long such a decoupling from the fundamentals can persist. 

LINER INDEX LEADS THE PACK
The liner index dominates all other sectors for more than a year. The green line in the chart to the right unveils a constant upward trend.

The next winner is the tanker sector, whereas the offshore index has lost more than 30% over the course of the last twelve months.  
 

BULKER SENTIMENT INDEX BEGIN TO LOSE MOMENTUM
Our broad ‘Notos Maritime Sentiment Index’ continues to stay in positive territory and indicates a sound environment for shipping stocks in general. 

However, the ‘Notos Bulker Sentiment Index’ has weakened again and just crossed the zero-line. 

The tanker sentiment point sideways-upwards and seems to be confident for crude shipping stocks.
 

READJUSTMENT OF OUR TRADING STRATEGIES
In October, the Dow Jones Global Shipping Index gained more than 9%.

Our trading strategies ‘Calima’ and ‘Notos Maritime Strategy Index’ performed in a similar way and continued their outperformance.

We are currently in the process of aligning our trading strategies into one combined strategy. From January 2020 on, we will concentrate our strategies in the ‘Notos Maritime Strategy Index’ which will combine its successful factor strategy with the more discretionary approach from ‘Calima’ and the governance approach from the ‘Base Portfolio’. We will also utilize our ‘Sentiment Indices’ for trading purposes.

Please do not hesitate to contact us if you wish to learn more about our trading strategies.
 

GLOSSARY
NOTOS SHIPPING INDICES | Measure the average performance of listed shipping companies in each sector
NOTOS MARITIME SENTIMENT INDEX | Measures the sentiment of global shipping markets, ranks between -1 and +1

CALIMA | Closed-end maritime investment fund (AIF)
NOTOS MARITIME STRATEGY INDEX | Discretionary trading-strategy on shipping risks
BASE PORTFOLIO 2019 | Portfolio consisting of one selected ‘Quality Stock’ for each sector

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DISCLAIMER
This document has been prepared and approved by Notos Consult GmbH and is for informational purpose only. The information presented in this report is intended for the recipient to whom it was delivered. Reproduction or distribution of this document in whole or in part is not permitted without the express written consent of Notos Consult GmbH.
This document contains forward-looking statements. We caution the reader that forward-looking statements are not guarantees of future performance. Past returns are no indication of future returns. The development of the industry,
markets and companies described in this document, may differ materially from the forward-looking statement contained herein.

Information and opinions contained in this document have been compiled from sources believed to be reliable. Unless otherwise stated, any statements herein are based on our own estimates at the time of publication. Notos Consult GmbH makes no representation as to the accuracy or completeness of any of the information contained herein and accepts no liability for loss arising from the use of the information provided. 

This document is not an offer of any kind. This report has been prepared separately from any proposed offering of any security and as such information herein must not be relied upon as having been authorized or approved by the issuer of such security.

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