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17-07-2019 (Singapore)

P52288 Financial Risk Management in Shipping
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Financial Risk Management in Shipping

17 – 18 July 2019 | Mandarin Orchard Hotel, Singapore

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overview

Key Learning Outcomes

  • Sources of risks in shipping, and their hedging
  • Assess and compare risk management tools in Shipping (FFA vs CoA or Time Charter)
  • Principles and use of FFAs, its practicality and how they manage shipping risks
  • Practical examples on trading FFAs, modelling fleet’s exposure, and exercises on calculating flat rate and TCE
  • Analyse the options shipowners and charterers have to hedge their positions
  • Contracts and risk management
  • Bunker hedging tools
  • Know your exposure and understand freight positions and their roles in trading decisions
  • Obtain new tools for evaluating financial/ investment decisions, beyond the NPV (Net Present Value)

 Who Should Attend

This course is essential for CFOs, Finance Managers, Risk & Portfolio Managers as well as traders from

  • Ship owners and managers
  • Charterers
  • Dry bulk traders / commodity traders
  • Commodity financiers
  • Hedge funds
  • Investment banks
  • FFA Brokers

pricing

Packages Price
2 Day TrainingSGD $3495SGD $3295Early BirdEarly Bird

Early Bird Rate: Register and Pay on or before 17 May 2019

Register 2 Delegates & the 3rd attends FREE!
Group rate is based on normal rate of 2-day main conference package only.
For Group Registrations, email register@ibcasia.com.sg or call +65 6508 2401

 

  • Special Group Discount pricing is applicable to groups of 2 or more delegates from the same organisation registering for the same event, at the same time.
  • Fee stated is the discounted price PER DELEGATE. Only one discount applies – either the early bird rate OR the Special Group Discount.
  • All fees stated include luncheons, refreshments and complete set of documentation. It does not include the cost of accommodation and travel.
  • A 7% Goods & Services Tax (GST) is applicable to all Singapore based companies for Singapore venue.
  • View payment terms and bank transfer details, click here »

trainer

Dr. Stavros Tsolakis

Visiting Professor, Singapore Management University; Vice President, DST Shipping Group

Agenda

THE SHIPPING CONTRACTS AND RISKS

  • Contracts
  • Sources of risks
  • Fundamentals of freight markets
  • Supply and demand of vessels
  • Market cycles and trading environment
  • Shipping trend observations in major commodities traded
  • Freight rates updates
  • Factors affecting volatility

SHIPPING RISK MANAGEMENT

  • Sources of risks
  • Risk management and use of derivatives in shipping
  • Comparison of risks across shipping segments
  • Freight risk management tools available
  • Financial risk management in shipping
  • Interest rate risk
  • Financing examples and sources of interest rate risk
  • Instruments to manage risks
  • Hedging interest rate risk using forwards and futures
  • Currency swaps and swapations
  • Interest rate caps, floors and collars
  • Case studies

UNDERSTANDING SHIPPING NATURAL HEDGE

  • Analyse the options shipowners and charterers have to hedge their positions.
  • Shipowners’ Traditional Strategies to Minimise Financial Risk

TIME CHARTER EQUIVALENT (TCE)

  • How to calculate?
  • Practical exercise

THE FUTURES MARKET

  • The need for the development of freight futures concept
  • The Baltic Exchange Charts and how they are developed/structured.
  • Potential Users of Futures Contracts
  • A shipowners decision making process in hedging against a freight fall
  • A charterers’ decision making process in hedging against freight increase
  • OTC Swaps
  • Cleared swaps
  • Analyse the different futures and forward contracts in shipping

OVERVIEW OF CURRENT FFA MARKETS

  • The function
  • Principles and use of FFAs
  • Overview of markets (dry vs wet)
  • Using FFA to cover exposures
  • Charterers’ strategies
  • Owners’ strategies
  • Setting up a clearing account
  • Initial margins and margin calls
  • Default and netting

CORRELATIONS

  • Between FFA routes and the Physical Market
    • Trade routes and contracts available
    • Deciding which contract to use
  • Between Paper and Physical – choosing the right period and volume

PRICING AND SETTLEMENTS

  • Baltic index
  • Daily mark to market (M2M)
  • Contract settlement
  • Exchanges – mechanism and futurisation
  • Clearing houses and exchanges

EXERCISE:

  • Comparison between future, forward and physical hedging tools
  • What to trade, when and why
  • Assess the future market in identifying price risk period
  • Using a traded contract – manage your own daily book. Mark to market and final settlement

BUNKER RISK MANAGEMENT

  • Bunker market – how will it affect hedging
  • Fundamentals of bunker risk management in shipping
  • Bunker derivatives
  • Forward bunker contracts, hedging and trading
  • Options on bunker prices
  • Exercise

FFA MARKET IN PRACTICE

  • The forward curves – firm and indicative
  • Bids and offers – price matching
  • OTC vs Screen Trading
  • Trade flow process – OTC Cleared and Exchange traded
  • General Clearing Merchants (GCMs) – their role and function

FFA TO COVER EXPOSURES – KEY STRATEGIES FOR

  • Charterers
  • Owners
  • Traders

CLEARING HOUSES AND EXCHANGES

  • The function of a Clearing House
  • Setting up a Clearing account
  • Initial Margins and Margin Calls
  • Default and Netting
  • Exchanges – mechanism and Futurization
  • Swaps to Futurization. What the new regulations mean and
  • What implications they have in trading FFAs today

REAL OPTIONS AND FINANCIAL DECISION MAKING IN SHIPPING

  • Investigate the shortcomings of traditional Discounted Cash Flow (DCF) Models
  • Analyse the theory and the reasons behind the development of Real Option Theory
  • Apply Real Option Theory to financial decision making in shipping

when & where

17 - 18 Jul 2019

Mandarin Orchard Singapore, by Meritus
333 Orchard Road, Singapore 238867
Tel: +65 6831 6062 | Fax: +65 6737 3130
Mobile No.: +65 8298 9442

Contact Person: Tan Ai Li
Email: aili.tan@meritushotels.com
Website: www.meritushotels.com

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