Macro Strategist, Saxo Capital Markets

Kay Van-Petersen

Macro Strategist

Saxo Capital Markets

Thematic (Sector/Industry)

The clearest trade to me right now... Is monetizing the volatility in Oil through options&nbsp;Now I am exceptionally bearish on oil for a range of different factors &amp; think we break $40 in 2Q if not already in Apr (hence symmetrically very bearish on the Macro aspects of CA &amp; NO as well as very bullish on USDCAD &amp; USDNOK)However, that&rsquo;s another conversation &ndash; I just wanted to highlight the huge swings we&rsquo;ve been seeing in oil &ndash; given the hocus-pocus headlines that drive the up days &amp; the fundamental data points that drive the down days.

The clearest trade to me right now... Is monetizing the volatility in Oil through options&nbsp;Now I am exceptionally bearish on oil for a range of different factors &amp; think we break $40 in 2Q if not already in Apr (hence symmetrically very bearish on the Macro aspects of CA &amp; NO as well as very bullish on USDCAD &amp; USDNOK)However, that&rsquo;s another conversation &ndash; I just wanted to highlight the huge swings we&rsquo;ve been seeing in oil &ndash; given the hocus-pocus headlines that drive the up days &amp; the fundamental data points that drive the down days.

Oil is going to break $40 before E-2Q, but there is money to be made whether you are a bull or bear

EM PM, Ecstrat

Emad Mostaque

EM PM

Ecstrat

Ecstrat is a consultancy advising on asset allocation between global equity markets, with a focus on the intersection of governments, geopolitics, governance and markets.
 
Over the past few years and more especially since the Great Financial Crisis (GFC), investors have become more focused on short-term market movements and real-time returns and have consequently neglected the analysis of the underlying structural themes that underpin longer term performance.
​
More specifically we believe that the evolution of governance-based relationships between investors, controlling shareholders, labour and the state is one of the primary determinants of both relative and absolute performance between individual equity markets.
 
We will endeavour to provide investors with some of the context surrounding governance-related issues which encompass many different disciplines including history, economics and political science, as well as the financial metrics which are the most obvious manifestation of the structural characteristics of each market.
 
We will pay particular attention to the shifts and potential inflection points for governance in individual markets as these are often the best lead indicators for both economic and market performance.

Yemen has once again hit the headlines as structural issues lead to political uncertainty and tumult. The situation may not be as bad as the headlines are likely to make it&nbsp;out however and we believe it will be contained.

Yemen has once again hit the headlines as structural issues lead to political uncertainty and tumult. The situation may not be as bad as the headlines are likely to make it&nbsp;out however and we believe it will be contained.

There is a high probability of a nuclear deal being agreed between the P5 + 1 nations and Iran next Friday, 20th March. This may be the precursor for energy stocks to recouple to downside and for spending cuts to spread from capex to dividends for majors.

There is a high probability of a nuclear deal being agreed between the P5 + 1 nations and Iran next Friday, 20th March. This may be the precursor for energy stocks to recouple to downside and for spending cuts to spread from capex to dividends for majors.

Equity Research Analyst, Maritime sector, Drewry Maritime Financial Research

Ankush Kathuria CFA, FRM

Equity Research Analyst, Maritime sector

Maritime Sector, Equity & Credit Research

Drewry Maritime Financial Research

With no ties to other players in the shipping, finance or banking world, we provide a uniquely impartial view of the markets and companies we cover. Our parent organization, Drewry is a leading independent provider of research services to the maritime and shipping industry, employing over 100 professionals across an international network of offices in London, Delhi, Singapore and Shanghai. Combining our market-leading resources with seasoned sector expertise DFRS offers a highly differentiated and comprehensive range of investment and financial research services to lenders and prospective investors in publicly listed maritime and shipping companies. The full service of reports, supporting resources and sector orientated webinars provides our clients with the most complete picture of the organisations under coverage as is possible. We have been charting and analysing the world’s maritime markets for more than 40 years. This unrivalled intelligence and understanding provides the foundation of our research service. Our analysts have access to one of the most up-to-date, comprehensive and reliable sources of market insight and research data available today. We look at globally listed companies within the following sectors: Port Operators, Container Shipping, Container Manufacturing & Leasing, LNG Shipping, Dry Bulk Shipping and Tanker Shipping. Combine in-depth sector expertise with financial analysis focusing on over 50 stocks globally.

Equity Bottom-Up

Nordic American Tankers / Equity Bottom-Up

<ul><li>
High spot exposure to boost top line in rising market: Nordic American Tankers’ (NAT) fleet realised TCE rate of USD 12,000pd in 3Q18, ~13.2% higher than TCE rate of USD 10,600pd in 3Q17. However, the company’s TCE revenue during 3Q18 declined by a marginal 2% to USD 23.2m on account of a smaller fleet as NAT disposed its older vessels in 2018. Depressed freight rates took a toll on the company’s earnings and NAT reported a net loss of USD 38m during the quarter. However, tanker freight rates saw a rising trend on major trading routes in the beginning of 4Q18. We estimate a TCE revenue and EBITDA of USD 48.4m and USD 25.8m in 4Q18, respectively. NAT’s earnings are expected to remain in red; however, the losses will narrow down to USD 0.4m, compared with the net loss of USD 21.9m in 4Q17. The surge in demolitions in the last 12 months played a key role in the supply-demand dynamics and brought forward the potential recovery in the tanker market. We forecast NAT’s TCE revenue to grow at a CAGR of 21.1% to ~USD 230m in 2021 from an estimate of ~USD 130m in 2018. We expect the adjusted EBITDA to surge from USD 33.2m in 2018 to USD 137.5m in 2021. Consequently, we maintain our Attractive view with a fair value estimate of USD 2.65 per share for NAT’s stock.</li></ul>


High spot exposure to boost top line in rising market: Nordic American Tankers’ (NAT) fleet realised TCE rate of USD 12,000pd in 3Q18, ~13.2% higher than TCE rate of USD 10,600pd in 3Q17. However, the company’s TCE revenue during 3Q18 declined by a marginal 2% to USD 23.2m on account of a smaller fleet as NAT disposed its older vessels in 2018. Depressed freight rates took a toll on the company’s earnings and NAT reported a net loss of USD 38m during the quarter. However, tanker freight rates saw a rising trend on major trading routes in the beginning of 4Q18. We estimate a TCE revenue and EBITDA of USD 48.4m and USD 25.8m in 4Q18, respectively. NAT’s earnings are expected to remain in red; however, the losses will narrow down to USD 0.4m, compared with the net loss of USD 21.9m in 4Q17. The surge in demolitions in the last 12 months played a key role in the supply-demand dynamics and brought forward the potential recovery in the tanker market. We forecast NAT’s TCE revenue to grow at a CAGR of 21.1% to ~USD 230m in 2021 from an estimate of ~USD 130m in 2018. We expect the adjusted EBITDA to surge from USD 33.2m in 2018 to USD 137.5m in 2021. Consequently, we maintain our Attractive view with a fair value estimate of USD 2.65 per share for NAT’s stock.

Nordic American Tankers: Market Recovery on Horizon; Higher Pay-Outs to Support Stock

Transport Sector, China and Asia-focused Research

Charles De Trenck

Event-Driven

Tanker shares probably showed up on many aggressive investor stock screens in the last couple of days. But the trade has been on a couple of times recently. And just about came back to its recent starting point a few days ago, in some cases. That is how steep some of the sell-offs were. But the overall original trade probably started when oil made its big decline. We can delineate the trades pretty clearly, while also observing some names that have moved quickly against those still languishing somewhat. We look at some recent performances, better versus weaker trades.

Tanker shares probably showed up on many aggressive investor stock screens in the last couple of days. But the trade has been on a couple of times recently. And just about came back to its recent starting point a few days ago, in some cases. That is how steep some of the sell-offs were. But the overall original trade probably started when oil made its big decline. We can delineate the trades pretty clearly, while also observing some names that have moved quickly against those still languishing somewhat. We look at some recent performances, better versus weaker trades.

Ongoing Coverage: Tankers in Sweet Spot of Negative Correlation to Oil... Share Rebounds

United States

Nordic American Tankers Limited is a shipping company that owns and charters Suezmax tankers for oil transportation.  The Company's ships are all active in the spot freight market.

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Nordic American Tankers (NAT US)

Oil is going to break $40 before E-2Q, but there is money to be made whether you are a bull or bear

The clearest trade to me right now... Is monetizing the volatility in Oil through options Now I am exceptionally bearish on oil for a range of...

Kay Van-Petersen

Yemen - Dancing on the heads of snakes

Yemen has once again hit the headlines as structural issues lead to political uncertainty and tumult. The situation may not be as bad as the...

Emad Mostaque

Will an Iran deal crack oil?

There is a high probability of a nuclear deal being agreed between the P5 + 1 nations and Iran next Friday, 20th March. This may be the precursor...

Emad Mostaque

Nordic American Tankers: Market Recovery on Horizon; Higher Pay-Outs to Support Stock

High spot exposure to boost top line in rising market: Nordic American Tankers’ (NAT) fleet realised TCE rate of USD 12,000pd in 3Q18, ~13.2%...

Drewry Maritime Financial Research

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52-week Range

Market Cap (USDm)

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Oil is going to break $40 before E-2Q, but there is money to be made whether you are a bull or bear

The clearest trade to me right now... Is monetizing the volatility in Oil through options Now I am exceptionally bearish on oil for a range of...

Kay Van-Petersen

Yemen - Dancing on the heads of snakes

Yemen has once again hit the headlines as structural issues lead to political uncertainty and tumult. The situation may not be as bad as the...

Emad Mostaque

Will an Iran deal crack oil?

There is a high probability of a nuclear deal being agreed between the P5 + 1 nations and Iran next Friday, 20th March. This may be the precursor...

Emad Mostaque

Nordic American Tankers: Market Recovery on Horizon; Higher Pay-Outs to Support Stock

High spot exposure to boost top line in rising market: Nordic American Tankers’ (NAT) fleet realised TCE rate of USD 12,000pd in 3Q18, ~13.2%...

Drewry Maritime Financial Research

Ongoing Coverage: Tankers in Sweet Spot of Negative Correlation to Oil... Share Rebounds

Tanker shares probably showed up on many aggressive investor stock screens in the last couple of days. But the trade has been on a couple of times...

Charles De Trenck