Earnings Yield and Predictability in the Dry Bulk Shipping Industry

We examine the relation between vessel prices, net earningsand holding period returns in the dry bulk shipping industry. In doing so, we provide a framework for pricing shipping assets,with finite economic lives and also subject to wear and tear.Shipping earnings yields negatively forecast future net earnings growth while there is no consistent evidence of time-varying risk premia. We provide an economic interpretation for the obtained resultsand argue that the investment decisions of shipowners affect the current price of the asset through the expectedcash flow stream,thus implying cash flow predictabilit

Asset valuation in dry bulk shipping

This thesis examines the dry bulk sector of the shipping industry. We begin by analysing the relation between second-hand vessel prices, net earnings, and holding period returns. Specifically, we provide strong statistical evidence that almost the entire volatility of shipping earnings yields can be attributed to variation in expected net earnings growth; almost none to expected returns variation and almost none to varying expectations about the terminal earnings yield. According to our results, earnings yields are negatively and significantly related to future net earnings growth. Furthermore, we find no consistent, strong statistical evidence supporting the existence of time-varying risk premia in the valuation of dry bulk vessels. Accordingly, we integrate the examination of the second-hand market by incorporating in the analysis the trading activity related to dry bulk vessels. For this purpose, we develop a heterogeneous expectations asset pricing model that can account for the actual behaviour of vessel prices and the positive correlation between net earnings, vessel prices, and second-hand vessel transactions. The proposed economy consists of two agent types who form heterogeneous expectations about future net earnings and at the same time under(over)estimate the future demand responses of their competitors. Formal estimation of the model suggests that the average investor expectations in the second-hand market for ships must be “near-rational”. In particular, the investor population must consist of a very large fraction of agents with totally – or very close to – rational beliefs while the remaining ones must hold highly extrapolative beliefs; thus, there must exist significant heterogeneity of beliefs in the market. Having concluded the analysis of the second-hand physical shipping market we turn to the derivative market for Forward Freight Agreements (FFAs) related to the dry bulk shipping sector. Accordingly, we illustrate formally that the bulk of volatility in the FFA basis can be attributed to expectations about future physical market conditions rather than expectations about future risk premia. Despite this finding, though, we document the existence of a bias in the FFA rates in the form of “contango” but also of both a strong momentum effect and significant predictability of risk premia by price-based signals and economic variables reflecting physical market conditions. The evidence of bias is further supported by the results of three econometric tests which suggest rejection of the unbiased expectations hypothesis. Finally, to justify these findings, we develop a dynamic asset pricing framework that can incorporate both the “hedging pressure” feature and a heterogeneous-beliefs explanation

The Formation of FFA Rates in Dry Bulk Shipping: Spot Rates, Risk Premia and Heterogeneous Expectations

This article examines the formation of forward rates in the dry bulk shipping industry. We illustrate that the bulk of basis volatility can be attributed to expectations about future physical market conditions rather than expectations about future risk premia. However, there exists significant predictability of risk premia by both price-based signals and economic variables. To explain this finding, we develop a dynamic asset pricing framework where, apart from having different objective functions, agents might also differ in the way they form expectations about future market conditions Accordingly, we argue that the average investor should hold “near-rational” but slightly contrarian beliefs

Asset Pricing with Mean reversion: The Case of Ships

We develop a heterogeneous-beliefsasset pricing model with microeconomic foundations that reproducesasset prices, cash flowsand tradingactivity ina real asset economy. In contrast to the majority of financial markets’ behavioural models,and in line with the nature of the shipping industry, in this model agents extrapolate fundamentals. Formal estimation of the model indicates that an economy where a small fraction of agents significantly extrapolates fundamentals can explain the positive relation between earnings, vessel prices,and trading activity

Mycophenolate mofetil and intravenous cyclophosphamide are similar as induction therapy for class V lupus nephritis

Class V lupus nephritis (LN) occurs in one-fifth of biopsy-proven cases of systemic lupus erythematosus. To study the effectiveness of treatments in this group of patients, we pooled analysis of two large randomized controlled multicenter trials of patients with diverse ethnic and racial background who had pure class V disease. These patients received mycophenolate mofetil (MMF) or intravenous cyclophosphamide (IVC) as induction therapy for 24 weeks, with percentage change in proteinuria and serum creatinine as end points. Weighted mean differences, pooled odds ratios, and confidence intervals were calculated by using a random-effects model. A total of 84 patients with class V disease were divided into equal groups, each group had comparable entry variables but one received MMF and one received IVC. Within these groups, 33 patients on MMF and 32 patients on IVC completed 24 weeks of treatment. There were no differences between the groups in mean values for the measured end points. Similarly, no difference was found regarding the number of patients who did not complete the study or who died. In patients with nephrotic syndrome, no difference was noted between those treated with MMF and IVC regarding partial remission or change in urine protein. Hence we found that the response to MMF as induction treatment of patients with class V LN appears to be no different from that to IVC

Research and innovation identified to decarbonise the maritime sector

The maritime sector requires technically, environmentally, socially, and economically informed pathways to decarbonise and eliminate all emissions harmful to the environment and health. This is extremely challenging and complex, and a wide range of technologies and solutions are currently being explored. However, it is important to assess the state-of-the-art and identify further research and innovation required to accelerate decarbonisation. The UK National Clean Maritime Research Hub have identified key priority areas to drive this process, with particular focus on marine fuels, power and propulsion, vessel efficiency, port operations and infrastructure, digitalisation, finance, regulation, and policy

Observation of the post-construction performance of the system of groins along an eroding beach

A system of six groins was constructed along an eroding coast of reversing sediment transport. This paper describes the performance of the groin system in terms of the evolution of the shoreline, as function of angle of wave approach and the location of each groin within the system.Etude de cas consacrée à la côte nord de la Crête où la construction d’un port de pêche a entraîné une vive érosion de la côte, avec pour conséquence également le rapide comblement du bassin. Un laboratoire a étudié diverses solutions possibles à cette évolution après une modélisation complète du système : celle-ci a permis de montrer l’existence d’une puissante dérive littorale, bien supérieure en volume à ce qui s’échange entre La plage et les petits fonds. Les épis ont semblé la meilleure des protections possibles dès lors qu’on n’envisageait pas le déplacement du port. L’implantation de 6 épis a fait l’objet d’un suivi dont les résultats provisoires sont présentés.Moutzouris Constantinos I. Observation of the post-construction performance of the system of groins along an eroding beach. In: Cahiers du Centre nantais de recherche pour l'aménagement régional, n°41-42, 1994. Défense des côtes ou protection de l'espace littoral, quelles perspectives ? Actes du colloque international (17-20 octobre 1991) pp. 226-234

Gas transfer under breaking waves: experiments and an improved vorticity-based model

In the present paper a modified vorticity-based model for gas transfer under breaking waves in the absence of significant wind forcing is presented. A theoretically valid and practically applicable mathematical expression is suggested for the assessment of the oxygen transfer coefficient in the area of wave-breaking. The proposed model is based on the theory of surface renewal that expresses the oxygen transfer coefficient as a function of both the wave vorticity and the Reynolds wave number for breaking waves. Experimental data were collected in wave flumes of various scales: a) small-scale experiments were carried out using both a sloping beach and a rubble-mound breakwater in the wave flume of the Laboratory of Harbor Works, NTUA, Greece; b) large-scale experiments were carried out with a sloping beach in the wind-wave flume of Delft Hydraulics, the Netherlands, and with a three-layer rubble mound breakwater in the Schneideberg Wave Flume of the Franzius Institute, University of Hannover, Germany. The experimental data acquired from both the small- and large-scale experiments were in good agreement with the proposed model. Although the apparent transfer coefficients from the large-scale experiments were lower than those determined from the small-scale experiments, the actual oxygen transfer coefficients, as calculated using a discretized form of the transport equation, are in the same order of magnitude for both the small- and large-scale experiments. The validity of the proposed model is compared to experimental results from other researchers. Although the results are encouraging, additional research is needed, to incorporate the influence of bubble mediated gas exchange, before these results are used for an environmental friendly design of harbor works, or for projects involving waste disposal at sea