Full Article at IIR has reaffirmed its Recommended rating for PIA after undertaking a review post the appointment of a new Portfolio Manager, Harding Loevner. The full report can be found on the IIR website. On 26 July 2021, Pengana International Equities Limited (PIA) announced a fully franked dividend of 1.35 cents per share for the June quarter. This represents an 8% increase on the March quarter dividend and takes the total dividends declared for FY21 of 5.1 cents per share, fully franked....
The independent financial analyst theScreener just awarded an improved star rating to GOLAR LNG PARTNERS (US), active in the Marine Transportation industry. As regards its fundamental valuation, the title receives an improved star rating and now shows 4 out of 4 possible stars. With regard to its market behaviour, it remains unchanged and can be qualified as risky. theScreener considers that these elements allow slightly upgrading its rating to Neutral. As of the analysis date February 26, 2021,...
In its Phase 1 trade document, China pledges to increase US exports of energy products by a total amount of USD18.5bn in 2020, then USD33.9bn, reaching USD52.4bn by 2021. Energy is defined as LNG, crude oil, refined products (including LPG) and coal. The value of US exports of crude, LNG and LPG in 2017 was USD6.7bn, of which two-thirds was crude. Assuming crude will account for 50% of the increment, US exports to China by 2021 could rise to 1.3mbpd. The pure substitution effect should see addit...
In a 23 August update, we pointed out that the US-China trade war had hurt crude, LNG and LPG, and that a further escalation was likely. While the full extent is yet to be known, the “phase one†deal would positively impact dry bulk trade, and could see positive effects for container trade. Energy-related products would be positively affected if part of the USD200bn of purchases from the US that China has pledged to make, and is likely to be rewarded in further phases.
We believe the LNG spot shipping market is as good as it gets, with rates at USD140k/day. We recommend entering long term contracts, which look to be a key share price driver in 2020, when the LNG shipping market could disappoint unless Asia’s share of US volumes picks up to 50%.
LNG freight markets are up 100% in two weeks to USD125k/day for TFDE vessels, fuelled by contango in forward prices and floating storage, as key demand regions either are full on storage or experiencing import constraints. We have déjà vu from Q4 2018, when LNG rates hit USD180k/day as 30 vessels were in storage for similar reasons. In our view this is backed by current low LNG prices of USD5.6/mmBtu, which are down 50% YOY; if there was a scarcity of LNG and high import demand, LNG prices wou...
LNG spot rates are on the rise, up USD5k/day on Friday to USD72k/day, and we forecast a Q4 headline rate of USD130k/day. LNG prices are USD5.4/mmBtu YTD (-45% YOY) on record-high new LNG volumes combined with the top four importers reporting flat demand YOY. China and India risk being fully utilised on regas capacity in the high season and China is now storing up to reduce its dependence on LNG imports during the peak season at a time when the Russian pipeline is set to start, while Europe’s i...
We believe the volume of LPG production outages in Saudi Arabia following this past weekend’s attacks could weigh on the VLGC market as the US struggles to fill demand due to capacity issues, despite soaring oil prices which could widen the US-Asia arbitrage. For crude tankers, the available inventories in Saudi Arabia should be an adequate buffer for a production shortfall near-term, while potential US volumes could be a positive if outages are not repaired in 2–3 weeks’ time and be a pos...
The US-China trade war has hurt US exports of crude, LNG, and LPG to China. In H1 2018 China imported 25% of all US crude exports, 14% of LNG, and 9% of LPG, while in H1 2019, China imported only 4% of US crude exports, 2% of LNG, and 1% of LPG. Accordingly, new tariffs on oil would have less impact as the trade has already been affected. We believe there will be a further escalation in the trade war in the next 12 months (in line with DNB Market’s macro view), hence the trade war should conti...
We analysed the potential impact by 2040 on shipping of the IEA’s three energy mix scenarios, with 5-year intervals. If contracting stays low (2019 YTD), we see the global order book falling 35% by 2020 from already 15-year lows, but if ordering picks up, asset lifecycles will being cut by 25% to meet the Paris Agreement goals.
The latest data from DNV GL indicates an interest to book scrubbers for installation also beyond 2019, as June additions added 50% to 2020 installations and brought the end-2020 total to above 3,500 units. Orders are closing in on our estimates for tankers and dry bulk, but the uptake in containers since our November forecasts has been more than twice our expectations, leading to 23% of HFO demand currently being covered after IMO 2020.
We have cut our LNG rates as two out of the top three importers are set to reach full regas utilisation, resulting in lower tonne-mile and low gas prices. We forecast rates to double by Q4 2019, and utilisation to peak in 2020 ahead of a decline in utilisation until 2022.
After positive signals since February, last week was a big step back for those who believed US–China trade relations were improving. Tariffs remain at 25% for LPG, were lifted to 25% for LNG, and remain at zero for crude. We estimate a -1.8% tonne-mile impact for LPG and -0.4% for LNG and crude; we see limited downside, and significant upside should an agreement be reached.
We have raised our 2019e EBITDA by 15% on a contract extension in Kuwait. We count four potential dropdown candidates that may well be extended given the promising FSRU market. DPS of USD0.4042 per quarter is sustainable on our models, but the average contract length of 4.2 years leaves some re-employment risk in our view. In light of this, we reiterate our HOLD, while we have cut our target price to USD13.5 (16.2), which implies a 12% (10%) dividend yield on current distribution.
LNG shipping rates are down ~80% since November but up 7% in the past 10 days. Global LNG prices collapsed from Q4 into Q1, but Asian LNG futures have risen 15% in the past few days, thus we see fundamentals turning positive. With the current LNG pricing, gas is priced lower than coal in Chinese el production, likely not sustainable in our view, which in turn should reopen the US-Asia LNG price arbitrage, boosting tonne-mile, rates, and utilisation. We favour FLEX LNG at a ~8% discount to newbui...
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