LPG SHINES BRIGHTLY
It was a fantastic week for VLGC investors. BW LG reported their solid Q3 results and announced to switch to quarterly dividend payments. This led to a sharp increase in the share prices of BW LPG, Avance Gas, and Dorian LPG. Our LPG sector index increased by nearly 10% w-o-w. Avance Gas will report their Q3 results this week and we would be surprised if they would not comment on a plan for future distributions to shareholders - let's see.
The good thing about VLGCs is the understatement of the financial analysts. One of the Norwegian investment banks just recently published a new report on BW LPG and they mentioned all the good things in the making like net fleet reduction this winter, strong Chinese PDH demand, and solid US export growth expectations. However, their TCE forecasts do not really fit into this rosy fundamental picture as they forecast TCEs to drop next year. This leaves some headroom for further future upgrades, as we already see first cargos to be fixed for January 2020 at healthy levels.
Our trading strategies benefitted from this development and were able to reach a new year high with nearly +50% performance y-o-y. We continued to realize some profits on our VLGC positions just to trim down their portfolio weighting to more 'normal' levels. Our market exposure stands now at 75%.
Our maritime sentiment index is still above the Zero-Line, indicating a positive environment for shipping stocks.