Research on shipping finance in an international maritime centre
Date of Issue2016
School of Civil and Environmental Engineering
The capital intensive nature of the shipping industry implies the importance of shipping finance to the industry. As a plan has been proposed by Maritime and Port Authority of Singapore (MPA) to develop Singapore as an International Maritime Centre (IMC), the development of the shipping finance industry need to be closely monitored and then promoted and guided accordingly given its importance. Thus, the trend of shipping finance in current market situation was analysed in our project. In-depth literature reviews were conducted, which helped the team to identify the literature gaps and potential areas of studies in our project. There are very few researches on analyzing specifically on the performance of banks with specialty in the shipping sector nor on assessing the potential correlations between ship finance and other sectors in the context of developing an IMC. Besides the literature gaps found, given the volatility nature of the shipping industry, the risk imposed in shipping finance banks or institutes are in a relatively high level. Thus, the team utilized the Pearson Product Moment Correlation model to analyse the correlation between the performance of shipping banks and the general shipping cycle. The purpose of doing this was hoping to pave the way for possible development of mathematically guided business decision models for the banks or financial institutes in view of the shipping market situation and outlook. In addition, extensive research on data and market information through reliable platforms like Bloomberg, Marine Money and Dealogic to facilitate the analyses and the implementing of the correlation model. Besides the secondary data, primary information was also sought by surveys to and interviews with industrial professionals. Verification of secondary data were also sought in the interview to ensure its validity and reliability. The qualitative evaluation of the correlation between shipping finance and other related maritime sectors were carried out based on the primary information we obtained from the survey and the interviews. This paper concluded with the main findings in the project and the recommendation for more in-depth study about the correlation between the performance of shipping banks with the general shipping market cycle on the basis of our research done in this project.
Final Year Project (FYP)
Nanyang Technological University