EQUITY RESEARCH Research report prepared by DNB Markets, a … · 2018-09-16 · 5% of shipping...
Transcript of EQUITY RESEARCH Research report prepared by DNB Markets, a … · 2018-09-16 · 5% of shipping...
SHIPPING SECTOR
Scrubbing up nicely for IMO 2020 With the deadline for compliance with the IMO’s sulphur cap less than 16 months away, we have taken another look at the likely outcome for shipping. Following up on our December 2016 note, we conclude that current forward fuel prices imply a less significant impact on the shipping balance than previously. Scrubber uptake is accelerating towards 2,300 units by 2020 on our estimates (covering 15% of pre-2020 heavy fuel oil (HFO) demand) and largely offsetting potential positive effects of higher fuel costs on vessel speed and supply.
On course for 2,300 scrubbers by early 2020... We forecast scrubber uptake to reach
2,300 by early-2020, a sharp increase from the latest data indicating 1,316 due to: 1) our
belief the current figures do not reveal the full picture; 2) attractive paybacks and 3) still-
available capacity. We expect major shipping segments to account for more than 90% of
scrubber installations from 2018 to 2020, reaching 973 in dry bulk, 530 in tankers and
383 in containers by 2020.
… covering 15% of pre-2020 HFO bunker demand. The larger and more fuel-hungry
vessels are likely to be overrepresented at the scrubber shop. On our calculations, 2,300
scrubbers would represent just 2.5% of the 2020e fleet, but c13% of total shipping fuel
consumption, or c15% of shipping’s HFO demand. This reflects the average scrubber-
fitted vessel consuming 46tpd.
5% of shipping fleet consuming 38% of total fuel. Based on our assumption of the
entire shipping fleet by 2020e numbering around 95k vessels, we calculate the most
fuel-hungry 5% consume about 38% of all marine fuels, and the top 2.5% account for
24%. Container vessels make up only 6% of the fleet, but 30% of total marine fuel
consumption, dry bulk represents 12% of the fleet and consumes 24%, and tankers are
10% of the fleet with 21% of consumption in our outlook for 2020.
Put simply, scrubbers look a good investment. Assuming a USD250/tonne fuel price
spread between HFO and a compliant alternative, we estimate a scrubber investment
payback period of nine months for a VLCC, 12 months for a VLGC, 14 months for a
Capesize, 17 months for an MR and 18 months for a Supramax.
Thanks to scrubbers, we calculate a Capesize slowsteaming impact of just 0.5%.
The intuitive conclusion from higher compliant bunker costs post-2020e would be 4%
slower average Capesize speeds at current compliant fuel prices (USD550/tonne, above
the current HFO price of USD450/tonne). However, based on a 2020e HFO price of
USD350/tonne, we believe scrubber-fitted vessels would be incentivised to speed up,
partly offsetting slower speeds from expected higher fuel costs for non-fitted vessels.
This implies a net slowsteaming effect (based on 35% scrubber uptake – currently 15%),
of 0.8% slower speeds (not 4%), reducing effective supply by just 0.5% (not 2.9%).
Investment choices are out there. For scrubberphiles, we cover Safe Bulkers (BUY,
TP USD3.80) in dry bulk and DHT Holdings (BUY, TP USD6.30) in tankers, both with
scrubbers on 48% of their vessels. The sceptics can choose between Genco Shipping
(BUY, TP USD19.7) and Euronav (BUY, TP USD12.8) – neither have any scrubbers.
Outside our coverage, Star Bulk and Hunter Group have 100% of their vessels fitted.
Shipping vs OSEBX (12m)
Source: Factset
EQUITY RESEARCH 13 September 2018
Research report prepared by DNB Markets, a division of DNB Bank ASA
This report was completed and disseminated at 17:29 CET on 13 September 2018
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Sep Nov Jan Mar May Jul
Shipping OSEBX (Rebased)
ANALYSTS
Nicolay Dyvik
+47 24 16 91 87
Jørgen Lian
+47 24 16 91 88
Mats Bye
+47 24 16 91 86
Please see the last two pages for important information. This research report was not produced in the US.Analysts employed by non-USaffiliates are not registered/qualified research analysts with FINRA in the United States.
Sector coverage
Target Share
Company Cur Rec Price Price P/E 18e P/E 19e P/E 20e
A. P. Møller Mærsk DKK BUY 10400 8964 nm 14.7 11.1
Avance Gas NOK HOLD 22.00 18.26 nm nm 9.9
BW LPG NOK HOLD 36.00 33.79 nm nm 28.9
D/S Norden DKK BUY 139.00 90.95 nm 25.2 8.6
DHT Holdings USD BUY 6.30 4.51 nm 50.7 4.7
Dorian LPG USD HOLD 8.20 7.60 nm nm nm
Eagle Bulk Shipping USD BUY 6.30 5.60 42.1 11.9 5.3
Epic Gas NOK BUY 19.40 9.00 5.2 1.7 1.2
Euronav USD BUY 12.80 8.25 nm nm 7.6
Flex LNG NOK BUY 18.80 13.15 67.5 15.1 5.0
Frontline NOK BUY 60.00 43.20 nm 13.2 4.6
GasLog USD BUY 19.90 18.75 28.7 19.0 9.4
Genco Shipping & Trading USD BUY 19.70 12.77 10.9 4.4 3.1
Golar LNG USD BUY 43.00 25.94 nm nm nm
Golar LNG Partners USD SELL 11.10 13.06 16.3 25.6 15.2
Golden Ocean NOK BUY 95.00 73.30 11.6 6.1 4.8
Höegh LNG Holdings NOK BUY 63.00 43.50 9.1 8.2 6.8
Höegh LNG Partners USD HOLD 19.10 18.55 10.1 12.1 12.3
MPC Container Ships NOK BUY 70.00 48.40
Odfjell NOK BUY 44.00 30.00 nm 12.5 5.3
Safe Bulkers USD BUY 3.80 2.63 10.2 3.8 2.8
Scorpio Tankers USD BUY 4.00 1.90 nm nm nm
Stolt-Nielsen NOK BUY 172.0 126.8 8.6 5.4 4.9
Teekay Tankers USD BUY 2.00 1.00 nm 28.2 6.3
Wallenius Wilhelmsen LogisticsNOK BUY 49.00 32.65 15.1 7.1 5.7
Wilh. Wilhelmsen Holding NOK BUY 273.0 179.8 4.6 6.6 5.6
Source: DNB Markets
DNB Markets
13 September 2018
3
Table of contents
Wind in scrubber uptake sails 4
2,300 scrubbers by early-2020e = 15% of HFO demand 4 Our 2020e scrubber forecast is 1.75x current order intake 5
Marine bunker market and implications 7
5% of fleet consumes 38% of fuel 7 85% of the HFO market needs a new home come 2020 8
Scrubber economics still looking good 10
Even a Supramax bulker would have 1.5 years payback 10
Speeds should still come down – slightly 11
Scrubber ships should speed up, while others should slow 11 Scrubber uptake dictates average fuel price and fleet speed 11
Company scrubber overview 13
Scrubber contracting picking up 13 Four entities fully covered with scrubbers 13
‘New regulations to fuel an upswing’ revisited 15
Background to the sulphur limit from our December 2016 report 15 Alternatives for compliance 15 Effects of the new sulphur limit 16
DNB Markets
13 September 2018
4
Wind in scrubber uptake sails
2,300 scrubbers by early-2020e = 15% of HFO demand Based on latest datapoints, we believe the market for scrubber deliveries into 2020 is still open
and that additional orders will materialise. While 619 scrubbers currently are scheduled to be
fitted in 2019, we believe this number will increase further and also allow for additional orders
with installations in early-2020, taking the tally to ~2,300 scrubbers by year-end or c2.5% of the
fleet. We believe this is a conservative estimate, and our forecasts peg average consumption
per scrubber-fitted vessel to 46tpd, which would add up to ~38mt or 0.7mbpd bunker
consumption. On our estimates this equates to 13% of total fuel consumption; assuming an 80%
market share for HFO of the total fuel market translates into scrubbers accounting for 15% of
expected HFO demand ahead of the 2020 sulphur cap regulations.
Scrubbers – current and DNB Markets’ delivery forecasts
by early-2020 by segment
Scrubber-fitted vessels – share of total fuel consumption
per segment by early-2020
Source: DNV GL (historical data), DNB Markets (forecasts) Source: DNB Markets
On a per-segment basis, we expect uptake to be naturally skewed towards the larger fuel-
thirsty vessels to reap the most benefit from expected fuel price spreads. Also, questions
have been posed by the industry if HFO will be readily available in more remote areas where
smaller vessel operate, adding another layer of uncertainty to the investment decision. In the
crude tanker sector, we believe 23% of the VLCC fleet could be equipped with scrubbers
entering 2020 versus 14% for Suezmax and 7% for Aframax vessels, and 35% of Capesizes
in the dry bulk fleet compared to 9% of Panamaxes and 3% of Supramaxes.
DNB forecast 2020e crude tankers fleet scrubber uptake DNB forecast 2020e product tankers fleet scrubber uptake
Source: DNB Markets Source: DNB Markets
160 12049
329 422
213
196
118
44
150
50
200
550
170
311
170
49
530
973
383
221143
55
0
200
400
600
800
1,000
1,200
Cru
de
Pro
du
ct
Ch
em
ica
l
Tan
kers
Dry
bu
lk
Co
nta
ine
r
Cru
ise
/ferr
y
RO
RO
/PC
C
LP
G
Scru
bbers
per
segm
ent
(Pu
rple
=cu
rren
t, g
reen
=D
NB
fo
recasts
)
17.0%
6.0%
2.0%
10.4%12.3%
10.9%
24.8%
0%
5%
10%
15%
20%
25%
30%
Cru
de
Pro
du
ct
Ch
em
ica
l
Tan
kers
Dry
bu
lk
Co
nta
ine
r
Cru
ise
/fe
rry
Scru
bber-
fitted v
essels
as s
hare
of per
segm
ent
consum
ption
793
576
689
86
185
7947
0
23.3%
13.7%
6.8%
0.0% 0%
5%
10%
15%
20%
25%
0
100
200
300
400
500
600
700
800
900
VLCC Suezmax Aframax Panamax
Share
of
scru
bber
upta
ke
Num
ber
of
vessels
and s
cru
bbers
Number of vessels Scrubbers Share (% rhs)
397 384
1,611
741
50 696
18
12.6%
1.6%
6.0%
2.4%
0%
2%
4%
6%
8%
10%
12%
14%
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
LR2 LR1 MR Handy
Share
of
scru
bber
upta
ke
Num
ber
of
vessels
and s
cru
bbers
Number of vessels Scrubbers Share (% rhs)
DNB Markets
13 September 2018
5
DNB forecast 2020e dry bulk fleet scrubber uptake DNB forecast 2020e container fleet scrubber uptake
Source: DNB Markets Source: DNB Markets
Our 2020e scrubber forecast is 1.75x current order intake The latest data on scrubber orders from DNV GL shows steep growth in the number of vessels
due to be equipped with scrubbers as we approach the 1 January 2020 deadline for IMO’s 0.5%
sulphur cap regulations on international marine fuels. With the deadline now less than 16
months away, we believe this data provides some transparency on the availability of scrubbers
by 2020e – it shows 619 scrubbers are expected to be fitted during 2019e, up from the 286
installations in 2018e, but only 48 in 2020e. The aggregate 1,321 scrubbers (one scheduled for
2022) is split 502 for newbuilds and 819 retrofits.
DNV’s current number of vessels with scrubber by end of year per segment (including
newbuilds)
Source: DNV GL (underlying data), DNB Markets (calculations)
The fleet added 197 scrubbers over 2014–2015 following implementation of a 0.1% sulphur
limit in Sulphur Emission Control Areas (SECAs) from 1 January 2015 (of which 159 were
retrofits), with the cruise & ferry and RORO & PCC segments naturally being the main
contributors, accounting for more than 70% of the additions (140, of which 117 were retrofits)
due to their main areas of operation. However, this restriction affected just a fraction of the
total fleet, while the IMO regulation will be global.
1,801
2,673
3,638
3,375
626
24496 7
34.8%
9.1%
2.6%0.2% 0%
5%
10%
15%
20%
25%
30%
35%
40%
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
Capesize Panamax Supramax Handysize
Sh
are
of
scru
bb
er
up
take
Nu
mber
of
vessels
and s
cru
bbers
Number of vessels Scrubbers Share (% rhs)
156
915
1,305
3,009
26241
1115
16.7%
26.3%
0.1%
3.8%
0%
5%
10%
15%
20%
25%
30%
0
500
1,000
1,500
2,000
2,500
3,000
3,500
Post-Panamax Neo-Panamax Intermediate Feeder
Share
of
scru
bber
upta
ke
Num
ber
of
vessels
and s
cru
bbers
Scrubbers Scrubbers Share (% rhs)
404 422 425140
333 338 338
107
167 185 185
139153
168
189196 197
97
101101 101
99
230294
363
649
12681316 1320
0
200
400
600
800
1000
1200
1400
2014 2015 2016 2017 2018 2019 2020 2021
Vessels
with s
cru
bber
(num
ber)
Bulk Tankers Container Gas Cruise&Ferry RoRo&PCC General cargo Other
DNB Markets
13 September 2018
6
DNV’s current number of newbuilds and retrofits (year-end, including newbuilds)
Source: DNV GL (underlying data), DNB Markets (calculations)
Transitioning from the local SECA regulations to a global 0.5% sulphur limit has sparked
interest in scrubbers among the major shipping segments. As shown in the charts above, dry
bulk, tankers and containers are due to account for more than 90% of scrubber installations
over 2018–2019 and 95% of retrofits – taking their share of total scrubbers installed to 72%
by end-2019e.
Of the scrubbers registered to date, 38% are for newbuilds and 62% retrofits. Dry bulk and
tankers account for the lion’s share, with 425 and 338, respectively, with these segments also
covering a large part of the global fleet. The share of newbuilds with scrubbers on a per-
segment basis shows container and cruise & ferry at the low end despite relatively high fuel-
consumption figures, which corresponds to recent trends of ordering long-term shipping
assets with alternative fuel sources, such as LNG. CMA CGM announced orders for 22k TEU
vessels equipped for LNG propulsion in November 2017, and the world’s first LNG-powered
cruise ship AIDAnova was launched in August this year.
DNV’s number of vessels fitted with scrubber by segment DNV’s current share of retrofits
Source: DNV GL (underlying data), DNB Markets (calculations) Source: DNV GL (underlying data), DNB Markets (calculations)
18 47 67
115 252 4
81
497
501
81 1
83
227 248
397
787
819
819
99
230294
363
649
12681316 1320
15% 14% 15%
23%
51%
71% 72% 72%
0%
10%
20%
30%
40%
50%
60%
70%
80%
0
200
400
600
800
1000
1200
1400
2014 2015 2016 2017 2018 2019 2020 2021
Share
of
majo
r segm
ents
(dry
bulk
, ta
nkers
and c
onta
iner)
Vessels
with s
cru
bber
(num
ber)
Newbuildings Retrofits Share of dry bulk, tankers and container
170
145
53 2760 45
255
193
132
12
138
56
303
425
338
185
39
198
101
323
0
50
100
150
200
250
300
350
400
450
Bulk
Tan
kers
Co
nta
ine
r
Ga
s
Cru
ise
&F
err
y
Ro
Ro
&P
CC
Ge
ne
ral carg
o
Oth
er
Nu
mber
of
vessels
with s
cru
bber
Retrofit
Newbuilding
40%
43%
29%
69%
30% 4
5%
38%
60%
57%
71%
31%
70% 5
5%
94%
100%
62%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Bulk
Tan
kers
Co
nta
ine
r
Ga
s
Cru
ise
&F
err
y
Ro
Ro
&P
CC
Ge
ne
ral carg
o
Oth
er
Tota
l
Share
of
retr
ofit/new
build
Retro %
NB %
DNB Markets
13 September 2018
7
Marine bunker market and implications
5% of fleet consumes 38% of fuel Based on our calculations, we see c2.5% of the fleet being equipped with scrubbers by early-
2020, between them consuming about 15% of pre-regulation HFO demand from shipping. If
we consider the entire shipping fleet by 2020e of around 95k vessels, the most fuel-hungry
5% consume about 38% of all marine fuels, and the top 2.5% account for 24%. The chart
below illustrates cumulative fuel consumption by type of vessel (the 5% mark being in the
start of the Suezmaxes) ranked by average fuel consumption. The underlying data is based
on Clarkson’s fleet database and other fuel market research, including IEA and IMO
publications.
DNB Markets’ estimate of cumulative share of total marine fuel consumption by vessel
type
Source: Clarksons, IEA and IMO (underlying data), DNB Markets (further calculations)
Container vessels make up only 6% of the fleet, but consume 30% of total marine fuel, clearly
the most extreme segment in terms of fuel-consumption per vessel. However, large cruise
ships above 60k gross tonnes are even thirstier, but at just 220 vessels make up c4% of total
marine fuel consumption. These vessels have long-since fitted scrubbers to use cheaper
fuels, and we estimate 40–50% already are or will be kitted out. Dry bulk makes up a
meaningful 12% of the fleet, and consumes 24% of fuel, while tankers are 10% of the fleet
and 21% of consumption.
0%
10%
20%
30%
40%
50%
60%
70%
80%
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
10
%
11
%
12
%
13
%
14
%
15
%
16
%
17
%
18
%
19
%
20
%
21
%
22
%
23
%
24
%
25
%
26
%
27
%
Number of vessels as % of the total fleet
Cruise/ferry Container Tankers Dry bulk Other
3k T
EU
+
VLC
C PC
C &
VLG
C
LG
C Capesiz
e
Afr
am
ax/L
R2
Feeder
Cru
ise +
60k G
T
Suezm
ax
Cru
ise +
10k G
T
Panam
ax/L
R1
DNB Markets
13 September 2018
8
Share of consumption versus share of fleet in number of
vessels shows that 5% of vessels with highest
consumption account for 38% of total consumption…
… which is reflected in container vessels accounting for 6%
of the fleet in number of vessels, while consuming 30% of
total fuel consumption
Source: DNB Markets Source: DNB Markets
85% of the HFO market needs a new home come 2020 If 15% of marine fuel HFO demand is maintained through scrubbers as we enter 2020, 85%
of current demand is up for grabs. The expected supply overhang has put pressure on HFO
prices, and the current spread to MGO (0.1% sulphur content) for January 2020 is
USD365/tonne.
Current HFO and MGO forward price curves Change to forward price spreads HFO–MGO
Source: Bloomberg (price data), DNB Markets (calculations) Source: Bloomberg (price data), DNB Markets (calculations)
However, we believe the fleet will seek to minimise fuel costs by opting for the cheapest
solution to comply with the regulations. We expect a blended alternative 0.5% sulphur fuel to
be available at a discount to cleaner MGO. A synthetic compliant fuel blend can be found
using the blended cost for LSFO with 1.0% sulphur content (low-sulphur fuel oil versus high-
sulphur fuel oil (HSFO) with 3.5% sulphur content) and MGO with 0.1% sulphur to reach
compliant levels of sulphur. On current 2020 forward prices, the synthetic blend is selling for
about USD100/tonne less than MGO and narrowing the 2020 spread to USD246/tonne.
Various inputs and prices are shown in the table below.
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
0% 5% 10% 15% 20% 25% 30% 35% 40%
% o
f consum
ption
% of fleet
29.5%
23.7%
20.6%
12.3%
5.7%
12.1%
9.6%
5.7%
0%
5%
10%
15%
20%
25%
30%
35%
Container Dry bulk Tankers Cruise/ferry
Share of fuel consumption Share of fleet (nr of vessels)
200
300
400
500
600
700
800
Sep-18 Sep-19 Sep-20 Sep-21 Sep-22
US
D/t
on
Fuel Oil, Rotterdam 3.5%: 12/9/18
Gasoil, Rotterdam 0.1%: 12/9/18
150
200
250
300
350
400
450
Sep-18 Sep-19 Sep-20 Sep-21
US
D/t
onne
Spread, gasoil - fuel oil (USD/tonne); 17 June 2016
Spread, gasoil - fuel oil (USD/tonne); 21 December 2016
Spread, gasoil - fuel oil (USD/tonne); 7 February 2018
Spread, gasoil - fuel oil (USD/tonne); 13 June 2018
Spread, gasoil - fuel oil (USD/tonne); 11 September 2018
DNB Markets
13 September 2018
9
Current forward prices for marine fuels showing cheapest compliant fuel blend in bold (USD/tonne)
Source: Bloomberg (price data), DNB Markets (calculations)
Any further analysis of the implication for fuel prices in the post-2020 environment is beyond
the scope of this research. Based on the above assessment, we view a fuel price spread of
USD250/tonne between HFO and compliant fuel as a likely outcome of the regulations, and
we use spreads of USD150/tonne and USD350/tonne for sensitivities in our scrubber
investment payback calculations.
GASOIL
3.5% Rotterdam
FOB Barge
"HSFO"
1.0% Rotterdam
FOB Cargo
"LSFO"
380cSt 3.5%
Singapore
"HSFO"
LO-HI Spread
1.0% - 3.5%
0.1% Rotterdam
FOB Barge
Gasoil "MGO"
0.5% implied
blend:
88% MGO /
12% HSFO
0.5% implied
blend:
60% MGO /
40% LSFO
Oct'18 427 432 448 5 679 649 580
Nov'18 422 429 443 7 677 646 578
2019 386 423 407 37 674 639 573
2020 323 424 341 101 665 624 569
2021 331 429 348 98 637 600 554
2022 336 433 353 97 612 579 541
0.5% IMPLIED BLENDSFUEL OIL
DNB Markets
13 September 2018
10
Scrubber economics still looking good
Even a Supramax bulker would have 1.5 years payback We estimate payback periods for scrubber investments based on company feedback and
industry information on capex and opex, while assuming a flat (or average over the period)
fuel spread from HFO to other compliant alternatives after 1 January 2020.
We use the fuel price spreads discussed above as the basis for our calculations, coupled with
compiled consumption data for the fleet. We assume linear costs for operating a scrubber to
the vessel’s consumption on a USD/tonne basis, and vessel owners retain 100% of fuel
savings. However, if we assume a retainment ratio of 75% at a USD250/tonne spread, we
calculate the average payback time across the main asset classes would increase by five
months (or 33%), and similarly 14 months (or 100%) at a 50% retainment ratio.
Our payback period calculations per vessel type on three different fuel price-spread scenarios
yield the following results for the major bulk shipping segments:
Payback period for scrubber investment in main bulk
shipping segments Crude tank scrubber payback profile
Source: DNB Markets Source: DNB Markets
Dry bulk scrubber payback profile Product tankers scrubber payback profile
Source: DNB Markets Source: DNB Markets
0.5
1.0
0.8
1.0
0.7
0.2
0.5
0.4
0.5
0.3
0.6
1.3
1.0
1.3
0.8
0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5
VLCC
MR
Capesize
Supramax
VLGC
Payback period in years
USD350 fuel spread USD250 fuel spread USD150 fuel spread
0.5
0.7
0.9
0.9
0.2
0.3
0.4
0.4
0.6
0.9
1.1
1.1
0.0 0.5 1.0 1.5 2.0 2.5
VLCC
Suezmax
Aframax
Panamax
Payback period in years
USD350 fuel spread USD250 fuel spread USD150 fuel spread
0.8
0.9
1.0
1.1
0.4
0.4
0.5
0.5
1.0
1.2
1.3
1.3
0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5
Capesize
Panamax
Supramax
Handysize
Payback period in years
USD350 fuel spread USD250 fuel spread USD150 fuel spread
0.9
0.9
1.0
1.4
0.4
0.4
0.5
0.6
1.1
1.1
1.3
1.8
0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0
LR2
LR1
MR
Handy
Payback period in years
USD350 fuel spread USD250 fuel spread USD150 fuel spread
DNB Markets
13 September 2018
11
Speeds should still come down – slightly
Scrubber ships should speed up, while others should slow The intuitive conclusion from higher compliant bunker costs post-2020 would be that average
vessel speeds for a Capesize vessels would slow by ~4% at the current compliant fuel price
(USD550/tonne, up from the current HFO of USD450/tonne). However, we believe scrubber
ships would be incentivised to raise speeds on lower 2020e HFO prices (USD350/tonne),
partially offsetting the effect of slower speeds from expected higher fuel costs (for non-fitted
vessels). Hence, the net effect on slowsteaming, based on our forecast of 35% scrubber
uptake (currently 15%), would be 0.8% lower speeds and not 4%, reducing effective supply
by just 0.5% and not 2.9%.
Scrubber uptake dictates average fuel price and fleet speed The IMO 2020 sulphur cap is expected to increase fuel costs for vessels not equipped with a
scrubber, while HFO prices should decline from oversupply, resulting in lower fuel costs for
scrubber-fitted vessels. We see an adverse effect on average vessel speeds, and hence
aggregate shipping supply on a tonne-mile basis, that will be balanced out depending on
scrubber uptake within each segment as speed optimisation is determined on an per-vessel
basis.
The outcome of such decisions can be illustrated with a laden Capesize vessel as an
example. Our speed optimisation model provides an optimal speed at a given freight rate and
bunker price. For simplicity, say the current HFO bunker price is USD450/tonne and that
come 2020 HFO falls to USD350/tonne and a compliant fuel is priced at USD550/tonne. Our
2020 freight rate forecast for Capesize vessels is ~USD27.5k/day, and the spot is ~USD17.5k
at the time of writing.
DNB Markets’ speed optimisation model for a laden Capesize vessel (knots)
Source: DNB Markets
Ignoring the IMO 2020 regulations and assuming a flat HFO fuel price, we would expect a
laden Capesize vessel to sail at 11.8 knots today, increasing to 12.8k/day in 2020, illustrated
with the red arrow to the right. This 8.6% increase in speeds translates into roughly 6.1%
increased net shipping supply after adjusting for port time and other inefficiencies.
We calculate the resulting fuel changes from IMO’s sulphur cap would lead to part of the fleet
(with scrubbers) facing a USD350/tonne fuel price and the remainder (without scrubbers)
facing USD550/tonne fuel cost. The average fleet speed dictating aggregate demand could
either go up or down from the non-regulation base case above, depending on vessel scrubber
uptake. This is complicated by the non-linear relationship between speed and consumption.
Based on our forecast of 35% of Capesize vessels installing scrubbers by 2020, the net effect
in the table above would be an optimal speed of 12.7 knots (or a net 0.5% reduction in
effective shipping supply). This is up from the 11.8 knots optimal speed today due to
Bunker price 12500 15000 17500 20000 22500 25000 27500 30000 32500 35000 37500
100 15.3 15.3 15.3 15.3 15.3 15.3 15.3 15.3 15.3 15.3 15.3
150 14.0 14.4 14.8 15.2 15.3 15.3 15.3 15.3 15.3 15.3 15.3
200 13.1 13.6 13.9 14.3 14.6 14.9 15.2 15.3 15.3 15.3 15.3
250 12.5 12.9 13.3 13.6 13.9 14.2 14.5 14.7 15.0 15.2 15.3
300 12.1 12.5 12.8 13.1 13.4 13.7 13.9 14.2 14.4 14.6 14.8
350 11.7 12.1 12.4 12.7 13.0 13.2 13.5 13.7 13.9 14.1 14.3
400 11.4 11.7 12.1 12.4 12.6 12.9 13.1 13.3 13.5 13.7 13.9
450 11.1 11.5 11.8 12.1 12.3 12.6 12.8 13.0 13.2 13.4 13.6
500 10.9 11.2 11.5 11.8 12.0 12.3 12.5 12.7 12.9 13.1 13.3
550 10.7 11.0 11.3 11.6 11.8 12.0 12.3 12.5 12.7 12.8 13.0
600 10.5 10.8 11.1 11.4 11.6 11.8 12.0 12.2 12.4 12.6 12.8
650 10.3 10.6 10.9 11.2 11.4 11.6 11.8 12.0 12.2 12.4 12.6
700 10.1 10.5 10.7 11.0 11.2 11.5 11.7 11.9 12.0 12.2 12.4
750 10.0 10.3 10.6 10.8 11.1 11.3 11.5 11.7 11.9 12.0 12.2
OPTIMAL SPEED LADEN
TC rates [$/day]
DNB Markets
13 September 2018
12
improved rates, but 0.8% down from 12.8 knots in the 2020 base case assuming no impact
on fuel prices from regulations. Implementing 2020 fuel prices at current rates would lower the
optimal speed to 11.7 knots (assuming similar scrubber uptake as in our 2020e forecast). To
fully offset the expected positive impact from IMO 2020 on vessel speeds for Capesize
vessels, c43% would need to install a scrubber assuming constant fuel prices (i.e. additional
demand for HFO not affecting prices).
To illustrate the effect of bunker prices on effective fleet supply, we use the example that HFO
oversupply in 2020 is such that the price falls to USD250/tonne (it averaged USD213/tonne in
2016), while the compliant fuel price is unchanged. In this exercise, a scrubber-fitted
Capesize would have an optimal speed of 14.5 knots (up from 13.5 knots). On the basis of
35% of the fleet having scrubbers, this translates into average fleet speeds of 13.0 knots – a
2.0% increase from the base case. This would translate into net effective supply additions of
c1.4% after necessary adjustments.
Capesize is the segment with highest uptake of scrubbers by early-2020 on our forecasts
(35%) and the calculations are similar for the other vessel classes, but with larger declines in
speed on our forecasts as scrubber uptake is reduced. Still in dry bulk, we find 43% scrubber
uptake to be the tipping point also for Supramax vessels for unchanged speeds in 2020
(compared to our forecast of 2.6% uptake in 2020). Our calculations for the entire dry bulk
fleet, at the assumed fuel prices and our forecasts for scrubber uptake, indicate that the IMO
2020 regulations would lower effective dry bulk shipping supply by 1.5% due to slower
speeds.
Similarly, we calculate the crude tanker fleet will see a net effective supply decrease of c1.3%
as a result of the new regulation. For VLCCs, we calculate speeds would slow 1.5%,
translating into a c1.1% decline in net effective shipping supply. If c42% of VLCCs get
scrubbers, we would expect flat speeds in line with the non-regulation base case in 2020.
DNB Markets
13 September 2018
13
Company scrubber overview
Scrubber contracting picking up As previously mentioned, scrubber uptake has increased significantly in the past couple of
months, first with a series of tanker owners announcing plans to install scrubbers in June
(Frontline), July (DHT Holdings) and August (Torm). For the dry bulk owners, Golden Ocean
announced 16 firm scrubber contracts and nine options in August, while Star Bulk – which
had already announced some 20 scrubbers in June – revealed a full-fleet programme in
September. Also Eagle Bulk and Safe Bulkers announced programmes in September.
While we believe the list below is comprehensive, it is possible there are shortfalls as the
chart includes companies not under coverage. We focused on gathering data in the segments
that are relevant for our coverage universe, i.e. leaving out scrubbers installed on regular
ROROs, cruise liners or passenger ships.
We calculate scrubber coverage as a % of the fleet per 2020e by counting firm contracts
before dividing on the count of owned vessels as listed in Clarkson’s WFR.
Firm scrubber contracts, per shipping segment and owner (% of owned fleet as per WFR)
Sources: Clarkson’s WFR, companies, DNB Markets
Four entities fully covered with scrubbers As seen from the chart below, both the tanker and dry bulk space have entities providing
maximum exposure to the ‘scrubber case’ from 1 January 2020. Hunter and 2020 Bulkers
were specifically structured to opportunistically own eco-friendly scrubber vessels (VLCCs
and Newcastlemaxes, respectively), while Star Bulk and Okeanis Eco Tankers both have
broader fleets, giving further exposure to the different shipping segments.
In the chemical space, we expect Hansa Tankers (a private Norwegian company) to have
scrubbers installed on 58% of its owned fleet by 1 January 2020, far ahead of listed peers
Stolt Nielsen and Odfjell, which have yet to announce instalments of scrubbers. Dorian LPG is
the only player in the listed VLGC space to announce installations of scrubbers, and is also
considering retrofitting its engines to run on LPG. BW LPG has announced a similar
retrofitting, allowing four of its vessels to run on LPG in 2020.
10
0 %
100 %
52 %
48 %
40 %
38 %
24 %
0 %
0 %
0 %
10 %
58 %
4 %
0 %
20 %
17 %
8 %
3 %
1 %
0 %
41 %
0 %
0 %
100 %
100 %
53 %
48 %
29 %
17 %
0 %
0 %
0 %
0 %
0 %
0 %
10 %
20 %
30 %
40 %
50 %
60 %
70 %
80 %
90 %
100 %
SB
LK
20
20
Dsh
ips
SB
EG
LE
DN
OR
D
GO
GL
GN
K
SA
LT
DS
X
WW
L
HA
NS
A
SIN
OD
F
MS
C
HM
M
Eve
rgre
en
CM
A-C
GM
MA
ER
SK
MP
C
DO
RIA
N
AV
AN
CE
BW
LP
G
HU
NT
OE
T
TR
M
DH
T
FR
O
DIS
EU
RN
TN
K
ST
NG
AS
C
NA
T
Bulk Car Chemicals Container LPG Tankers
Share
of
ow
ned f
leet
with s
cru
bbers
(%
)
DNB Markets
13 September 2018
14
Company scrubber overview (as at 11 September 2018)
Sources: Company sources, DNB Markets, Clarkson WFR, various
Company name Confirmed Retrofits NBs OptionsAnnounced
provider
% of fleet
by 2020Notes
Golden Ocean 16 16 9 24 % All Capesize vessels, regular drydocks
DS Norden 18 16 2 5 Lang tech, Alfa 38 % Panamax, Supramax and MR.
Safe Bulkers 19 19 1 Alfa Laval 48 % 5 Kamsar, 13 Post-Pana and 1 Cape
Genco 0 %
Eagle Bulk 19 19 18 40 % Supramax and Ultramax vessels
Star Bulk 111 108 3 100 %
Scorpio Bulkers 0 %
Diana Shipping Inc. 0 %
2020 Bulkers 8 8 100 %
Dryships 13 13 Panasia 52 % 5 Ncmax, 5 Pmax, 2 Suez and one Afra
DHT 14 12 2 Alfa Laval 48 % All VLCCs
Frontline 14 14 22 Feen Marine 29 % All VLCCs
Euronav 0 %
Teekay Tankers 0 %
Scorpio Tankers 0 %
Hunter 7 7 100 % All VLCCs
Torm 47 38 9 Alfa Laval 53 % LR2, LR1 and MRs
Ardmore 0 %
Nordic American Tankers 0 %
D'Amico 6 6 17 % All vessels LR1
Okeanis ECO tank 11 7 4 100 % 4 VLCCs, 4 Suez and 3 LR2
Avance 0 %
BWLPG 0 %
Dorian 9 9 Clean Marine 41 % VLGCs
Stolt-Nielsen 6 6 Clean Marine 4 % 39k dwt chem parcel tankers
Odfjell 0 %
Other
peersHansa tankers 7 7 Clean marine 58 % 19k dwt chem. Parcel tankers
Car
Covered WWL 8 1 7 Wartsila 10 % 8k PCTC
Maersk 2 2 DuPont 1 % Has indicated willingness for more scrubbers
MPC Not announced
MSC 44 11 33 Wartsila 20 %
CMA-CGM 3 3 3 %
Evergreen 10 2 8 8 %
HMM 7 7 17 %
LP
G
Covered
Ch
em
icals Covered
Co
nta
ine
r
Covered
Other
peers
Bu
lk
Covered
Other
peers
Ta
nkers
Covered
Other
peers
DNB Markets
13 September 2018
15
‘New regulations to fuel an upswing’ revisited
Background to the sulphur limit from our December 2016 report MARPOL Annex VI, first adopted in 1997, limits the main air pollutants in ships’ exhaust gas,
including sulphur oxides (SOx) and nitrous oxides (NOx).
On 19 May 2005, the MEPC agreed to revise MARPOL Annex VI with the aim of significantly
strengthening emission limits. The revised MARPOL Annex VI requires all ships use fuels
with a sulphur content of 0.5% from 1 January 2020, but until October 2016, market
consensus was that this would be postponed until 2025 to give all stakeholders more time to
adapt.
However, an MEPC meeting in October 2016 decided that the fuel oil standard (0.50%
sulphur limit) will come into force on 1 January 2020, after a report1 assessing fuel oil
availability concluded positively ahead of the October meeting.
Regulatory sulphur limits in fuel oil
Source: DNB Markets
Annex VI also tightens restrictions on NOx, but this has been far less controversial as it only
applies to new vessels (while the SOx limit affects all vessels).
As proved by the BWM Convention, regulating global shipping is not easy. Shipowners can
be somewhat change-averse, but also creative in using the rules to their advantage. In the
case of BWM, few could have envisaged that that a de-harmonisation of the IOPP certificate
from other statutory certificates could be a way to postpone installation of a BWTS beyond the
next scheduled renewal survey. The main risk to the 0.5%-sulphur limit is (partial) reversal or
postponement of regulations.
That said, we believe most shipowners (owners of predominantly old tonnage are exceptions)
will benefit from the new regulation, and hence should embrace it. And if they need more
altruistic motivation not to resist, the rationale for the regulation speaks for itself: “The spread of
invasive species is now recognised as one of the greatest threats to the ecological and
economic well-being of the planet”2 and that “The number of premature deaths in Europe due to
[air pollution from] international ship traffic is ~49,500 and ~53,200 for the year 2000 and 2020,
respectively”.3
Alternatives for compliance There are two main alternatives to comply with the 0.5% sulphur limit from 2020:
1 ‘Assessment of Fuel Oil Availability’, CE Delft, July 2016
2 http://www.imo.org/en/OurWork/Environment/BallastWaterManagement/Pages/Default.aspx
3 http://ceeh.dk/CEEH_Reports/Report_3/
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
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20
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20
13
20
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17
20
18
20
19
20
20
20
21
20
22
20
23
20
24
20
25
20
26
20
27
Sulp
huur
%
Sulp
huur
%
ECA Global Subject to 2016 review (now concluded 2020)
DNB Markets
13 September 2018
16
Use a fuel with less than 0.5% sulphur. In practice, vessels just switch fuel, and there is
general consensus this should be technically feasible for all vessels. Most are likely to
switch to a sort of low-sulphur fuel oil, but LNG and methanol are also possible alternatives
for newbuilds (retrofitting engines would be very costly).
Continue to use high-sulphur fuel oil, but clean exhaust gas. This would require
installation of an exhaust gas cleaning system (EGCS), or a scrubber as it is more
commonly known.
Despite our belief that the regulatory changes provide more opportunities than threats to
shipowners, we also believe relatively few change-averse shipowners will be first movers. The
main difference between the BWM Convention and the new sulphur limit is that compliance
with the new sulphur limit will not trigger any capex; hence we expect this to be the primary
choice for shipowners. Nonetheless, the economics of installing a scrubber look compelling.
Effects of the new sulphur limit The change in marine bunker specifications lowering sulphur content from a maximum of
3.5% sulphur to a maximum of 0.5% has several implications, both for the shipping industry,
and for the oil refining industry.
We believe the ramifications for the refining industry are more severe than for shipping: for
shipping this is simply a matter of what fuel to use, and there are few reasons to think that a
new fuel will imply any technical difficulties in terms of operating the vessels and their main
engines (and auxiliaries are already predominantly using distillates).
For refiners, however, the change is more profound. The switch from HFO to a compliant fuel
is likely to hit the balance between fuel oil and gas oil from both sides: we calculate demand
for fuel oil will roughly halve while the middle distillate pool will see a ~20% demand increase,
with both widening the spread between the two prices. Also, the refinery runs (i.e. crude oil
demand) would likely need to increase, pushing up feedstock costs for all petroleum product
prices as crude prices rise.
The change in regulation is therefore likely to be positive for complex refiners with substantial
upgrade equipment, since cracking margins are likely to widen. On the other hand, the
simpler configurations, with a relatively higher fuel oil yield, would be worse off in the new
regulatory regime.
Global demand for fuel oil has been in decline for some time as its use in the stationary sector
has been substituted by other fuels. In 2015 BP reported total fuel oil consumption of 7.97m
bpd, about 8% of global oil consumption. Of this, about 4.2m bpd (~50%) was demand from
the marine sector. There was another 1.3m bpd of demand from the marine segment in the
distillates pool, but this was only ~4% of global distillates consumption (34.55m bpd in 2015
according to BP). The key is therefore that the drop in fuel oil demand following new
regulation is far more severe in relative terms than the increase in distillates demand.
DNB Markets
13 September 2018
17
Global oil consumption (kbpd) Share of fuel oil in global oil consumption
Source: BP Source: BP
Marine fuel oil consumption in 2012 (metric tonnes, as
reported) Marine fuel oil consumption in 2012 (m bpd, converted)
Source: CE Delft Source: CE Delft, DNB Markets
Fuel oil is considered a ‘waste’ product, since it typically sells at a discount to the feedstock
(crude oil), while the other product groups sell at a premium.
Important Information This report has been prepared by DNB Markets, a division of DNB Bank ASA. DNB Bank ASA is a part of the DNB
Group. This report is based on information obtained from public sources that DNB Markets believes to be reliable but
which DNB Markets has not independently verified, and DNB Markets makes no guarantee, representation or warranty
as to its accuracy or completeness. This report does not, and does not attempt to, contain everything material which
there is to be said about the Company. Any opinions expressed herein reflect DNB Markets’ judgement at the time the
report was prepared and are subject to change without notice.
Any use of non-DNB logos in this report is solely for the purpose of assisting in identifying the relevant issuer. DNB is not
affiliated with any such issuer.
This report is for clients only, and not for publication, and has been prepared for information purposes only by DNB Markets, a division of DNB Bank ASA. This report is the property of DNB Markets. DNB Markets retains all intellectual property rights (including, but not limited to, copyright) relating to the report. Sell-side investment firms are not allowed any commercial use (including, but not limited to, reproduction and redistribution) of the report contents, either partially or in full, without DNB Markets’ explicit and prior written consent. However, buy-side investment firms may use the report when making investment decisions, and may also base investment advice given to clients on the report. Such use is dependent on the buy-side investment firm citing DNB Markets as the source.
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
100,000
19
65
19
68
19
71
19
74
19
77
19
80
19
83
19
86
19
89
19
92
19
95
19
98
20
01
20
04
20
07
20
10
20
13
k b
pd
Fuel oil Middle distillates Light distillates Others
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
19
65
19
67
19
69
19
71
19
73
19
75
19
77
19
79
19
81
19
83
19
85
19
87
19
89
19
91
19
93
19
95
19
97
19
99
20
01
20
03
20
05
20
07
20
09
20
11
20
13
20
15
Share of fuel oil
188
18 7
33
42
228
65
8
0
50
100
150
200
250
HFO MGO LNG
Marine b
unker
fuel consum
ption (
m
tonne/y
ea
r as p
er
2012)
Main engine Aux Boiler
3.5
0.4 0.1
0.6
0.9
4.2
1.3
0.2
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
HFO MGO LNGMarine b
unker
fuel consum
ption (
m b
pd a
s
per
2012)
Main engine Aux Boiler
DNB Markets
13 September 2018
18
Price targets are based on a combination of several valuation methods such as discounted cash flow, pricing based on earnings multiples, multiple on book value, net asset value and peer comparison. Substantial material sources for coverage of this company include historical financial figures and communication with the company, and relevant third party information. If you would like further information on the valuation, methodology or underlying assumptions used in this note, please contact the analyst (contact details on front page).
Recommendation structure and risk classification
DNB Markets recommendations are based on absolute performance:
Buy - indicates an expected return greater than 10% within 12 months
Hold - indicates an expected return between 0 and 10% within 12 months
Sell - indicates an expected negative return within 12 months
The return-requirement bands above may be applied with some degree of flexibility depending on the liquidity and volatility characteristics of the individual share.
High risk - Volatility over 40 percent.
Medium risk - Volatility from 25 percent to 40 percent.
Low risk - Volatility under 25 percent.
Investing in any security is subject to substantial risk. Return on investment may vary greatly.
Careful consideration for possible financial distress should be accounted for before investing in any security.
Recommendation distribution and corporate clients for the last 12 months
Buy Hold Sell No_rec Total
Number 126 74 28 14 242
% of total 52% 31% 12% 6%
DNB Markets client 19% 11% 2% 2% 85
Readers should assume that DNB Markets may currently or may in the coming three months and beyond be providing or seeking
to provide confidential investment banking services or other services to the company/companies
Share positions in the company: Analyst* Employees** DNB*** Update
Number of shares 0 0 0 13/09/2018
*The analyst or any close associates. **Share positions include people involved in the production of credit and equity research,
including people that could reasonably be expected to have access to it before distribution.
***Share positions as part of DNB Group. Holdings as part of DNB Markets investment services activity are not included.
7,000
8,000
9,000
10,000
11,000
12,000
13,000
14,000
15,000
29-12-17 28-1-18 28-2-18 30-3-18 30-4-18 30-5-18 30-6-18 30-7-18 30-8-18 29-9-18
Price, Rating, and Price Target History A. P. Møller Mærsk (MAERSKB DC) as of 12-9-18
Source: Factset Estimates (Prices) / DNB (ratings and target price)
7-11-17B : 14600
1-2-18 B : 13200
20-2-18 B : 12900
22-5-18 B : 11800
4-7-18 B : 10400
Current 6 months volatility rates this security as MEDIUM risk.
DNB Markets has provided investment services and/or ancillary services to the company and received compensation for it during the past 12 months.
Readers should assume that DNB Markets may currently or may in the coming three months and beyond be providing or seeking
to provide confidential investment banking services or other services to the company/companies
Share positions in the company: Analyst* Employees** DNB*** Update
Number of shares 0 2000 0 13/09/2018
*The analyst or any close associates. **Share positions include people involved in the production of credit and equity research,
including people that could reasonably be expected to have access to it before distribution.
***Share positions as part of DNB Group. Holdings as part of DNB Markets investment services activity are not included.
DNB Markets
13 September 2018
19
16
18
20
22
24
26
28
29-12-17 28-1-18 28-2-18 30-3-18 30-4-18 30-5-18 30-6-18 30-7-18 30-8-18 29-9-18
Price, Rating, and Price Target History Avance Gas (AVANCE NO) as of 12-9-18
Source: Factset Estimates (Prices) / DNB (ratings and target price)
27-10-17B : 28.0
24-4-18 H : 22.0
Current 6 months volatility rates this security as MEDIUM risk.
DNB Markets has provided investment services and/or ancillary services to the company and received compensation for it during the past 12 months.
Readers should assume that DNB Markets may currently or may in the coming three months and beyond be providing or seeking
to provide confidential investment banking services or other services to the company/companies
Share positions in the company: Analyst* Employees** DNB*** Update
Number of shares 0 0 0 13/09/2018
*The analyst or any close associates. **Share positions include people involved in the production of credit and equity research,
including people that could reasonably be expected to have access to it before distribution.
***Share positions as part of DNB Group. Holdings as part of DNB Markets investment services activity are not included.
28
30
32
34
36
38
40
42
44
46
29-12-17 28-1-18 28-2-18 30-3-18 30-4-18 30-5-18 30-6-18 30-7-18 30-8-18 29-9-18
Price, Rating, and Price Target History BW LPG (BWLPG NO) as of 12-9-18
Source: Factset Estimates (Prices) / DNB (ratings and target price)
23-11-17B : 44.0
2-3-18 B : 45.0
24-4-18 H : 31.0
31-5-18 H : 34.0
9-8-18 H : 36.0
Current 6 months volatility rates this security as HIGH risk.
Readers should assume that DNB Markets may currently or may in the coming three months and beyond be providing or seeking
to provide confidential investment banking services or other services to the company/companies
Share positions in the company: Analyst* Employees** DNB*** Update
Number of shares 0 0 0 13/09/2018
*The analyst or any close associates. **Share positions include people involved in the production of credit and equity research,
including people that could reasonably be expected to have access to it before distribution.
***Share positions as part of DNB Group. Holdings as part of DNB Markets investment services activity are not included.
DNB Markets
13 September 2018
20
90
100
110
120
130
140
150
160
29-12-17 28-1-18 28-2-18 30-3-18 30-4-18 30-5-18 30-6-18 30-7-18 30-8-18 29-9-18
Price, Rating, and Price Target History D/S Norden (DNORD DC) as of 12-9-18
Source: Factset Estimates (Prices) / DNB (ratings and target price)
3-9-17B : 158
26-2-18 B : 145
4-5-18 B : 135
7-8-18 B : 141
17-8-18 B : 137
Current 6 months volatility rates this security as MEDIUM risk.
Readers should assume that DNB Markets may currently or may in the coming three months and beyond be providing or seeking
to provide confidential investment banking services or other services to the company/companies
Share positions in the company: Analyst* Employees** DNB*** Update
Number of shares 0 0 0 13/09/2018
*The analyst or any close associates. **Share positions include people involved in the production of credit and equity research,
including people that could reasonably be expected to have access to it before distribution.
***Share positions as part of DNB Group. Holdings as part of DNB Markets investment services activity are not included.
3.0
3.5
4.0
4.5
5.0
5.5
6.0
6.5
29-12-17 28-1-18 28-2-18 30-3-18 30-4-18 30-5-18 30-6-18 30-7-18 30-8-18 29-9-18
Price, Rating, and Price Target History DHT Holdings (DHT US) as of 12-9-18
Source: Factset Estimates (Prices) / DNB (ratings and target price)
14-11-17H : 4.00
6-3-18 B : 5.20
11-5-18 B : 5.10
6-7-18 B : 6.30
Current 6 months volatility rates this security as MEDIUM risk.
DNB Markets has provided investment services and/or ancillary services to the company and received compensation for it during the past 12 months.
Readers should assume that DNB Markets may currently or may in the coming three months and beyond be providing or seeking
to provide confidential investment banking services or other services to the company/companies
Share positions in the company: Analyst* Employees** DNB*** Update
Number of shares 0 0 0 13/09/2018
*The analyst or any close associates. **Share positions include people involved in the production of credit and equity research,
including people that could reasonably be expected to have access to it before distribution.
***Share positions as part of DNB Group. Holdings as part of DNB Markets investment services activity are not included.
DNB Markets
13 September 2018
21
6.8
7.0
7.2
7.4
7.6
7.8
8.0
8.2
8.4
8.6
8.8
29-12-17 28-1-18 28-2-18 30-3-18 30-4-18 30-5-18 30-6-18 30-7-18 30-8-18 29-9-18
Price, Rating, and Price Target History Dorian LPG (LPG US) as of 12-9-18
Source: Factset Estimates (Prices) / DNB (ratings and target price)
16-11-17H : 8.10
23-2-18 H : 8.20
Current 6 months volatility rates this security as MEDIUM risk.
Readers should assume that DNB Markets may currently or may in the coming three months and beyond be providing or seeking
to provide confidential investment banking services or other services to the company/companies
Share positions in the company: Analyst* Employees** DNB*** Update
Number of shares 0 0 0 13/09/2018
*The analyst or any close associates. **Share positions include people involved in the production of credit and equity research,
including people that could reasonably be expected to have access to it before distribution.
***Share positions as part of DNB Group. Holdings as part of DNB Markets investment services activity are not included.
4.0
4.5
5.0
5.5
6.0
6.5
7.0
7.5
8.0
29-12-17 28-1-18 28-2-18 30-3-18 30-4-18 30-5-18 30-6-18 30-7-18 30-8-18 29-9-18
Price, Rating, and Price Target History Eagle Bulk Shipping (EGLE US) as of 12-9-18
Source: Factset Estimates (Prices) / DNB (ratings and target price)
#N/A18-6-18 B : 7.10
14-8-18 B : 7.50
Current 6 months volatility rates this security as MEDIUM risk.
DNB Markets has provided investment services and/or ancillary services to the company and received compensation for it during the past 12 months.
Readers should assume that DNB Markets may currently or may in the coming three months and beyond be providing or seeking
to provide confidential investment banking services or other services to the company/companies
Share positions in the company: Analyst* Employees** DNB*** Update
Number of shares 0 0 0 13/09/2018
*The analyst or any close associates. **Share positions include people involved in the production of credit and equity research,
including people that could reasonably be expected to have access to it before distribution.
***Share positions as part of DNB Group. Holdings as part of DNB Markets investment services activity are not included.
DNB Markets
13 September 2018
22
6
8
10
12
14
16
18
20
29-12-17 28-1-18 28-2-18 30-3-18 30-4-18 30-5-18 30-6-18 30-7-18 30-8-18 29-9-18
Price, Rating, and Price Target History Epic Gas (EPICME NO) as of 12-9-18
Source: Factset Estimates (Prices) / DNB (ratings and target price)
1-12-17B : 19.4
Current 6 months volatility rates this security as HIGH risk.
DNB Markets has provided investment services and/or ancillary services to the company and received compensation for it during the past 12 months.
Readers should assume that DNB Markets may currently or may in the coming three months and beyond be providing or seeking
to provide confidential investment banking services or other services to the company/companies
Share positions in the company: Analyst* Employees** DNB*** Update
Number of shares 0 0 0 13/09/2018
*The analyst or any close associates. **Share positions include people involved in the production of credit and equity research,
including people that could reasonably be expected to have access to it before distribution.
***Share positions as part of DNB Group. Holdings as part of DNB Markets investment services activity are not included.
7
8
9
10
11
12
13
29-12-17 28-1-18 28-2-18 30-3-18 30-4-18 30-5-18 30-6-18 30-7-18 30-8-18 29-9-18
Price, Rating, and Price Target History Euronav (EURN US) as of 12-9-18
Source: Factset Estimates (Prices) / DNB (ratings and target price)
14-11-17H : 8.40
22-1-18 H : 9.00
6-3-18 B : 10.7
6-7-18 B : 12.5
10-8-18 B : 12.8
Current 6 months volatility rates this security as MEDIUM risk.
DNB Markets has provided investment services and/or ancillary services to the company and received compensation for it during the past 12 months.
Readers should assume that DNB Markets may currently or may in the coming three months and beyond be providing or seeking
to provide confidential investment banking services or other services to the company/companies
Share positions in the company: Analyst* Employees** DNB*** Update
Number of shares 0 0 0 13/09/2018
*The analyst or any close associates. **Share positions include people involved in the production of credit and equity research,
including people that could reasonably be expected to have access to it before distribution.
***Share positions as part of DNB Group. Holdings as part of DNB Markets investment services activity are not included.
DNB Markets
13 September 2018
23
10
11
12
13
14
15
16
17
18
19
29-12-17 28-1-18 28-2-18 30-3-18 30-4-18 30-5-18 30-6-18 30-7-18 30-8-18 29-9-18
Price, Rating, and Price Target History Flex LNG (FLNG NO) as of 12-9-18
Source: Factset Estimates (Prices) / DNB (ratings and target price)
21-11-17B : 15.9
16-2-18 B : 16.2
23-5-18 B : 16.6
5-9-18 B : 18.8
Current 6 months volatility rates this security as MEDIUM risk.
Readers should assume that DNB Markets may currently or may in the coming three months and beyond be providing or seeking
to provide confidential investment banking services or other services to the company/companies
Share positions in the company: Analyst* Employees** DNB*** Update
Number of shares 0 0 0 13/09/2018
*The analyst or any close associates. **Share positions include people involved in the production of credit and equity research,
including people that could reasonably be expected to have access to it before distribution.
***Share positions as part of DNB Group. Holdings as part of DNB Markets investment services activity are not included.
30
35
40
45
50
55
60
29-12-17 28-1-18 28-2-18 30-3-18 30-4-18 30-5-18 30-6-18 30-7-18 30-8-18 29-9-18
Price, Rating, and Price Target History Frontline (FRO NO) as of 12-9-18
Source: Factset Estimates (Prices) / DNB (ratings and target price)
23-11-17H : 44.0
19-2-18 H : 33.0
6-3-18 B : 42.0
29-5-18 B : 60.0
Current 6 months volatility rates this security as HIGH risk.
Readers should assume that DNB Markets may currently or may in the coming three months and beyond be providing or seeking
to provide confidential investment banking services or other services to the company/companies
Share positions in the company: Analyst* Employees** DNB*** Update
Number of shares 0 0 0 13/09/2018
*The analyst or any close associates. **Share positions include people involved in the production of credit and equity research,
including people that could reasonably be expected to have access to it before distribution.
***Share positions as part of DNB Group. Holdings as part of DNB Markets investment services activity are not included.
DNB Markets
13 September 2018
24
15
16
17
18
19
20
21
22
23
29-12-17 28-1-18 28-2-18 30-3-18 30-4-18 30-5-18 30-6-18 30-7-18 30-8-18 29-9-18
Price, Rating, and Price Target History GasLog (GLOG US) as of 12-9-18
Source: Factset Estimates (Prices) / DNB (ratings and target price)
7-11-17H : 18.5
21-2-18 H : 18.9
30-4-18 H : 17.7
14-5-18 H : 18.2
5-9-18 B : 19.9
Current 6 months volatility rates this security as MEDIUM risk.
Readers should assume that DNB Markets may currently or may in the coming three months and beyond be providing or seeking
to provide confidential investment banking services or other services to the company/companies
Share positions in the company: Analyst* Employees** DNB*** Update
Number of shares 0 0 0 13/09/2018
*The analyst or any close associates. **Share positions include people involved in the production of credit and equity research,
including people that could reasonably be expected to have access to it before distribution.
***Share positions as part of DNB Group. Holdings as part of DNB Markets investment services activity are not included.
12
13
14
15
16
17
18
19
20
21
29-12-17 28-1-18 28-2-18 30-3-18 30-4-18 30-5-18 30-6-18 30-7-18 30-8-18 29-9-18
Price, Rating, and Price Target History Genco Shipping & Trading (GNK US) as of 12-9-18
Source: Factset Estimates (Prices) / DNB (ratings and target price)
10-11-17B : 16.8
4-5-18 B : 19.8
11-5-18 B : 20.6
7-8-18 B : 19.4
14-8-18 B : 19.6
Current 6 months volatility rates this security as HIGH risk.
Readers should assume that DNB Markets may currently or may in the coming three months and beyond be providing or seeking
to provide confidential investment banking services or other services to the company/companies
Share positions in the company: Analyst* Employees** DNB*** Update
Number of shares 0 0 0 13/09/2018
*The analyst or any close associates. **Share positions include people involved in the production of credit and equity research,
including people that could reasonably be expected to have access to it before distribution.
***Share positions as part of DNB Group. Holdings as part of DNB Markets investment services activity are not included.
DNB Markets
13 September 2018
25
20
25
30
35
40
45
50
29-12-17 28-1-18 28-2-18 30-3-18 30-4-18 30-5-18 30-6-18 30-7-18 30-8-18 29-9-18
Price, Rating, and Price Target History Golar LNG (GLNG US) as of 12-9-18
Source: Factset Estimates (Prices) / DNB (ratings and target price)
13-9-17B : 33.0
23-4-18 B : 49.0
31-5-18 B : 39.0
5-9-18 B : 43.0
Current 6 months volatility rates this security as HIGH risk.
Readers should assume that DNB Markets may currently or may in the coming three months and beyond be providing or seeking
to provide confidential investment banking services or other services to the company/companies
Share positions in the company: Analyst* Employees** DNB*** Update
Number of shares 0 0 0 13/09/2018
*The analyst or any close associates. **Share positions include people involved in the production of credit and equity research,
including people that could reasonably be expected to have access to it before distribution.
***Share positions as part of DNB Group. Holdings as part of DNB Markets investment services activity are not included.
10
12
14
16
18
20
22
24
29-12-17 28-1-18 28-2-18 30-3-18 30-4-18 30-5-18 30-6-18 30-7-18 30-8-18 29-9-18
Price, Rating, and Price Target History Golar LNG Partners (GMLP US) as of 12-9-18
Source: Factset Estimates (Prices) / DNB (ratings and target price)
13-9-17H : 21.0
5-9-18 S : 11.1
Current 6 months volatility rates this security as HIGH risk.
DNB Markets has provided investment services and/or ancillary services to the company and received compensation for it during the past 12 months.
Readers should assume that DNB Markets may currently or may in the coming three months and beyond be providing or seeking
to provide confidential investment banking services or other services to the company/companies
Share positions in the company: Analyst* Employees** DNB*** Update
Number of shares 0 0 0 13/09/2018
*The analyst or any close associates. **Share positions include people involved in the production of credit and equity research,
including people that could reasonably be expected to have access to it before distribution.
***Share positions as part of DNB Group. Holdings as part of DNB Markets investment services activity are not included.
DNB Markets
13 September 2018
26
55
60
65
70
75
80
85
90
29-12-17 28-1-18 28-2-18 30-3-18 30-4-18 30-5-18 30-6-18 30-7-18 30-8-18 29-9-18
Price, Rating, and Price Target History Golden Ocean (GOGL NO) as of 12-9-18
Source: Factset Estimates (Prices) / DNB (ratings and target price)
10-11-17B : 83.0
25-5-18 B : 84.0
31-5-18 B : 85.0
7-8-18 B : 88.0
20-8-18 B : 90.0
Current 6 months volatility rates this security as MEDIUM risk.
DNB Markets has provided investment services and/or ancillary services to the company and received compensation for it during the past 12 months.
Readers should assume that DNB Markets may currently or may in the coming three months and beyond be providing or seeking
to provide confidential investment banking services or other services to the company/companies
Share positions in the company: Analyst* Employees** DNB*** Update
Number of shares 0 0 0 13/09/2018
*The analyst or any close associates. **Share positions include people involved in the production of credit and equity research,
including people that could reasonably be expected to have access to it before distribution.
***Share positions as part of DNB Group. Holdings as part of DNB Markets investment services activity are not included.
40
45
50
55
60
65
70
75
80
85
90
29-12-17 28-1-18 28-2-18 30-3-18 30-4-18 30-5-18 30-6-18 30-7-18 30-8-18 29-9-18
Price, Rating, and Price Target History Höegh LNG Holdings (HLNG NO) as of 12-9-18
Source: Factset Estimates (Prices) / DNB (ratings and target price)
16-11-17B : 90.0
15-2-18 B : 84.0
1-3-18 B : 76.0
25-5-18 B : 78.0
31-5-18 B : 67.0
3-8-18 B : 65.0
24-8-18 B : 63.0
Current 6 months volatility rates this security as MEDIUM risk.
Readers should assume that DNB Markets may currently or may in the coming three months and beyond be providing or seeking
to provide confidential investment banking services or other services to the company/companies
Share positions in the company: Analyst* Employees** DNB*** Update
Number of shares 0 0 0 13/09/2018
*The analyst or any close associates. **Share positions include people involved in the production of credit and equity research,
including people that could reasonably be expected to have access to it before distribution.
***Share positions as part of DNB Group. Holdings as part of DNB Markets investment services activity are not included.
DNB Markets
13 September 2018
27
15
16
17
18
19
20
21
22
23
24
29-12-17 28-1-18 28-2-18 30-3-18 30-4-18 30-5-18 30-6-18 30-7-18 30-8-18 29-9-18
Price, Rating, and Price Target History Höegh LNG Partners (HMLP US) as of 12-9-18
Source: Factset Estimates (Prices) / DNB (ratings and target price)
13-9-17B : 23.1
3-8-18 H : 19.1
Current 6 months volatility rates this security as LOW risk.
DNB Markets has provided investment services and/or ancillary services to the company and received compensation for it during the past 12 months. DNB Markets has been lead or co-lead manager related to an Investment Banking assignment for the company and received compensation for it during the past 12 months.
Readers should assume that DNB Markets may currently or may in the coming three months and beyond be providing or seeking
to provide confidential investment banking services or other services to the company/companies
Share positions in the company: Analyst* Employees** DNB*** Update
Number of shares 0 0 0 13/09/2018
*The analyst or any close associates. **Share positions include people involved in the production of credit and equity research,
including people that could reasonably be expected to have access to it before distribution.
***Share positions as part of DNB Group. Holdings as part of DNB Markets investment services activity are not included.
45
50
55
60
65
70
29-12-17 28-1-18 28-2-18 30-3-18 30-4-18 30-5-18 30-6-18 30-7-18 30-8-18 29-9-18
Price, Rating, and Price Target History MPC Container Ships (MPCC NO) as of 12-9-18
Source: Factset Estimates (Prices) / DNB (ratings and target price)
#N/A8-1-18 B : 64.0 8-1-18 B : 64.0
12-2-18 B : 68.0
10-4-18 B : 66.0
1-6-18 B : 70.0
Current 6 months volatility rates this security as MEDIUM risk.
DNB Markets is market maker/liquidity provider for Odfjell. DNB Markets has provided investment services and/or ancillary services to the company and received compensation for it during the past 12 months.
Readers should assume that DNB Markets may currently or may in the coming three months and beyond be providing or seeking
to provide confidential investment banking services or other services to the company/companies
Share positions in the company: Analyst* Employees** DNB*** Update
Number of shares 0 0 0 13/09/2018
*The analyst or any close associates. **Share positions include people involved in the production of credit and equity research,
including people that could reasonably be expected to have access to it before distribution.
***Share positions as part of DNB Group. Holdings as part of DNB Markets investment services activity are not included.
DNB Markets
13 September 2018
28
28
30
32
34
36
38
40
42
44
29-12-17 28-1-18 28-2-18 30-3-18 30-4-18 30-5-18 30-6-18 30-7-18 30-8-18 29-9-18
Price, Rating, and Price Target History Odfjell (ODF NO) as of 12-9-18
Source: Factset Estimates (Prices) / DNB (ratings and target price)
25-8-17B : 37.0
7-5-18 B : 44.0
14-5-18 B : 43.0
27-8-18 B : 44.0
Current 6 months volatility rates this security as MEDIUM risk.
Readers should assume that DNB Markets may currently or may in the coming three months and beyond be providing or seeking
to provide confidential investment banking services or other services to the company/companies
Share positions in the company: Analyst* Employees** DNB*** Update
Number of shares 0 0 0 13/09/2018
*The analyst or any close associates. **Share positions include people involved in the production of credit and equity research,
including people that could reasonably be expected to have access to it before distribution.
***Share positions as part of DNB Group. Holdings as part of DNB Markets investment services activity are not included.
2.4
2.6
2.8
3.0
3.2
3.4
3.6
3.8
4.0
4.2
29-12-17 28-1-18 28-2-18 30-3-18 30-4-18 30-5-18 30-6-18 30-7-18 30-8-18 29-9-18
Price, Rating, and Price Target History Safe Bulkers (SB US) as of 12-9-18
Source: Factset Estimates (Prices) / DNB (ratings and target price)
10-11-17B : 3.70
16-2-18 B : 4.10
7-8-18 B : 3.90
Current 6 months volatility rates this security as HIGH risk.
Readers should assume that DNB Markets may currently or may in the coming three months and beyond be providing or seeking
to provide confidential investment banking services or other services to the company/companies
Share positions in the company: Analyst* Employees** DNB*** Update
Number of shares 0 0 0 13/09/2018
*The analyst or any close associates. **Share positions include people involved in the production of credit and equity research,
including people that could reasonably be expected to have access to it before distribution.
***Share positions as part of DNB Group. Holdings as part of DNB Markets investment services activity are not included.
DNB Markets
13 September 2018
29
1.5
2.0
2.5
3.0
3.5
4.0
4.5
29-12-17 28-1-18 28-2-18 30-3-18 30-4-18 30-5-18 30-6-18 30-7-18 30-8-18 29-9-18
Price, Rating, and Price Target History Scorpio Tankers (STNG US) as of 12-9-18
Source: Factset Estimates (Prices) / DNB (ratings and target price)
21-11-17H : 3.40
6-3-18 H : 2.40
25-4-18 B : 3.70
30-4-18 B : 4.00
Current 6 months volatility rates this security as HIGH risk.
DNB Markets has provided investment services and/or ancillary services to the company and received compensation for it during the past 12 months.
Readers should assume that DNB Markets may currently or may in the coming three months and beyond be providing or seeking
to provide confidential investment banking services or other services to the company/companies
Share positions in the company: Analyst* Employees** DNB*** Update
Number of shares 0 2000 0 13/09/2018
*The analyst or any close associates. **Share positions include people involved in the production of credit and equity research,
including people that could reasonably be expected to have access to it before distribution.
***Share positions as part of DNB Group. Holdings as part of DNB Markets investment services activity are not included.
90
100
110
120
130
140
150
160
170
180
29-12-17 28-1-18 28-2-18 30-3-18 30-4-18 30-5-18 30-6-18 30-7-18 30-8-18 29-9-18
Price, Rating, and Price Target History Stolt-Nielsen (SNI NO) as of 12-9-18
Source: Factset Estimates (Prices) / DNB (ratings and target price)
10-10-17B : 155
5-2-18 B : 143
10-4-18 B : 138
6-7-18 B : 172
Current 6 months volatility rates this security as MEDIUM risk.
Readers should assume that DNB Markets may currently or may in the coming three months and beyond be providing or seeking
to provide confidential investment banking services or other services to the company/companies
Share positions in the company: Analyst* Employees** DNB*** Update
Number of shares 0 0 0 13/09/2018
*The analyst or any close associates. **Share positions include people involved in the production of credit and equity research,
including people that could reasonably be expected to have access to it before distribution.
***Share positions as part of DNB Group. Holdings as part of DNB Markets investment services activity are not included.
DNB Markets
13 September 2018
30
0.8
1.0
1.2
1.4
1.6
1.8
2.0
2.2
29-12-17 28-1-18 28-2-18 30-3-18 30-4-18 30-5-18 30-6-18 30-7-18 30-8-18 29-9-18
Price, Rating, and Price Target History Teekay Tankers (TNK US) as of 12-9-18
Source: Factset Estimates (Prices) / DNB (ratings and target price)
24-11-17H : 1.50
6-3-18 B : 1.80
6-7-18 B : 2.00
Current 6 months volatility rates this security as HIGH risk.
DNB Markets has provided investment services and/or ancillary services to the company and received compensation for it during the past 12 months. DNB Markets has been lead or co-lead manager related to an Investment Banking assignment for the company and received compensation for it during the past 12 months.
Readers should assume that DNB Markets may currently or may in the coming three months and beyond be providing or seeking
to provide confidential investment banking services or other services to the company/companies
Share positions in the company: Analyst* Employees** DNB*** Update
Number of shares 0 100 0 13/09/2018
*The analyst or any close associates. **Share positions include people involved in the production of credit and equity research,
including people that could reasonably be expected to have access to it before distribution.
***Share positions as part of DNB Group. Holdings as part of DNB Markets investment services activity are not included.
30
35
40
45
50
55
60
65
70
29-12-17 28-1-18 28-2-18 30-3-18 30-4-18 30-5-18 30-6-18 30-7-18 30-8-18 29-9-18
Price, Rating, and Price Target History Wallenius Wilhelmsen Logistics (WWL NO) as of 12-9-18
Source: Factset Estimates (Prices) / DNB (ratings and target price)
8-11-17B : 67.0
19-2-18 H : 65.0
9-5-18 H : 46.0
14-6-18 B : 51.0
10-8-18 B : 49.0
Current 6 months volatility rates this security as HIGH risk.
DNB Markets has provided investment services and/or ancillary services to the company and received compensation for it during the past 12 months.
Readers should assume that DNB Markets may currently or may in the coming three months and beyond be providing or seeking
to provide confidential investment banking services or other services to the company/companies
Share positions in the company: Analyst* Employees** DNB*** Update
Number of shares 0 77 0 13/09/2018
*The analyst or any close associates. **Share positions include people involved in the production of credit and equity research,
including people that could reasonably be expected to have access to it before distribution.
***Share positions as part of DNB Group. Holdings as part of DNB Markets investment services activity are not included.
DNB Markets
13 September 2018
31
Legal statement These materials constitute research as defined in section 9-27 (1) of the Norwegian Securities Trading Regulations (Norwegian: verdipapirforskriften), and are not investment advice as defined in section 2-4(1) of the Norwegian securities trading act (Norwegian verdipapirhandelloven). The analyst hereby certifies that (i) the views expressed in this report accurately reflect that research analyst’s personal views about the company and the securities that are the subject of this report, and (ii) no part of the research analyst’s compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed by that research analyst in this report. DNB Markets employees, including research analysts, may receive compensation that is generated by overall firm profitability. Confidentiality rules and internal rules restricting the exchange of information between different parts of DNB Markets/DNB Bank ASA or the DNB Group are in place to prevent employees of DNB Markets who are preparing this report from utilizing or being aware of information available in the DNB Group that may be relevant to the recipients’ decisions. DNB Markets and the DNB Group have incorporated internal rules and regulations in order to avoid any potential conflicts of interest.
The Report has been prepared by DNB Markets, a division of DNB Bank ASA, a Norwegian bank organized under the laws of the Kingdom of Norway and under supervision by the Norwegian Financial Supervisory Authority, The Monetary Authority of Singapore, and on a limited basis by the Financial Conduct Authority and the Prudential Regulation Authority of the UK, and the Financial Supervisory Authority of Sweden. Details about the extent of our regulation by local authorities outside Norway are available from us on request. It is issued subject to the General Business Terms for DNB Markets and information about the terms is available at www.dnb.no. For requests regarding the General Business Terms of the Singapore Branch of DNB Bank ASA, please contact +65 6212 6144. Information about the DNB Group can be found at www.dnb.com. DNB Markets is a member of The Norwegian Securities Dealers Association, which has issued recommendations and market standards for securities companies. The Association's Internet address where the recommendations and market standards can be found is: www.vpff.no. This report is not an offer to buy or sell any security or other financial instrument or to participate in any investment strategy. No liability whatsoever is accepted for any direct or indirect (including consequential) loss or expense arising from the use of this report. Distribution of research reports is in certain jurisdictions restricted by law. Persons in possession of this report should seek further guidance regarding such restrictions before distributing this report. Please contact DNB Markets at 08940 (+47 915 08940) for further information and inquiries regarding this report, including an overview on all recommendations from DNB Markets over the last 12 Months according to Market Abuse Regulations.
Additional information for clients in Singapore The report has been distributed by the Singapore Branch of DNB Bank ASA. It is intended for general circulation and does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should seek advice from a financial adviser regarding the suitability of any product referred to in the report, taking into account your specific financial objectives, financial situation or particular needs before making a commitment to purchase any such product. You have received a copy of the report because you have been classified either as an accredited investor, an expert investor or as an institutional investor, as these terms have been defined under Singapore's Financial Advisers Act (Cap. 110) ("FAA") and/or the Financial Advisers Regulations ("FAR"). The Singapore Branch of DNB Bank ASA is a financial adviser exempt from licensing under the FAA but is otherwise subject to the legal requirements of the FAA and of the FAR. By virtue of your status as an accredited investor or as an expert investor, the Singapore Branch of DNB Bank ASA is, in respect of certain of its dealings with you or services rendered to you, exempt from having to comply with certain regulatory requirements of the FAA and FAR, including without limitation, sections 25, 27 and 36 of the FAA. Section 25 of the FAA requires a financial adviser to disclose material information concerning designated investment products which are recommended by the financial adviser to you as the client. Section 27 of the FAA requires a financial adviser to have a reasonable basis for making investment recommendations to you as the client. Section 36 of the FAA requires a financial adviser to include, within any circular or written communications in which he makes recommendations concerning securities, a statement of the nature of any interest which the financial adviser (and any person connected or associated with the financial adviser) might have in the securities. Please contact the Singapore branch of DNB Bank ASA at +65 6212 6144 in respect of any matters arising from, or in connection with, the report. The report is intended for and is to be circulated only to persons who are classified as an accredited investor, an expert investor or an institutional investor. If you are not an accredited investor, an expert investor or an institutional investor, please contact the Singapore Branch of DNB Bank ASA at +65 6212 6144. We, the DNB group, our associates, officers and/or employees may have interests in any products referred to in the report by acting in various roles including as distributor, holder of principal positions, adviser or lender. We, the DNB group, our associates, officers and/or employees may receive fees, brokerage or commissions for acting in those capacities. In addition, we, the DNB group, our associates, officers and/or employees may buy or sell products as principal or agent and may effect transactions which are not consistent with the information set out in the report.
In the United States Each research analyst named on the front page of this research report, or at the beginning of any subsection hereof, hereby certifies that (i) the views expressed in this report accurately reflect that research analyst’s personal views about the company and the securities that are the subject of this report; and (ii) no part of the research analyst’s compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed by that research analyst in this report.
The research analyst(s) named on this report are foreign research analysts as defined by FINRA Rule 1050. The only affiliate contributing to this research report is DNB Bank through its DNB Markets division (“DNB Markets/DNB Bank”); the foreign research analysts employed by DNB Markets/DNB Bank are named on the first page; the foreign research analysts are not registered/qualified as research analysts with FINRA; foreign research analysts are not associated persons of DNB Markets, Inc. and therefore are not subject to the restrictions set forth in FINRA Rules 2241 and 2242 regarding restrictions on communications with a subject company, public appearances and trading securities held by a research analyst account.
This is a Third Party Research Report as defined by FINRA Rules 2241 and 2242. Any material conflict of interest that can reasonably be expected to have influenced the choice of DNB Markets/DNB Bank as a research provider or the subject company of a DNB Markets/DNB Bank research report, including the disclosures required by FINRA Rules 2241 and 2242 can be found above.
This report is being furnished solely to Major U.S. Institutional Investors within the meaning of Rule 15a-6 under the U.S. Securities Exchange Act of 1934 and to such other U.S. Institutional Investors as DNB Markets, Inc. may determine. Distribution to non-Major U.S. Institutional Investors will be made only by DNB Markets, Inc., a separately incorporated subsidiary of DNB Bank that is a U.S. broker-dealer and a member of the Financial Industry Regulatory Authority
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29-12-17 28-1-18 28-2-18 30-3-18 30-4-18 30-5-18 30-6-18 30-7-18 30-8-18 29-9-18
Price, Rating, and Price Target History Wilh. Wilhelmsen Holding (WWI NO) as of 12-9-18
Source: Factset Estimates (Prices) / DNB (ratings and target price)
13-11-17B : 323
14-5-18 B : 273
Current 6 months volatility rates this security as MEDIUM risk.
DNB Markets
13 September 2018
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(“FINRA”) and the Securities Investor Protection Corporation (“SIPC”).
Any U.S. recipient of this report seeking to obtain additional information or to effect any transaction in any security discussed herein or any related instrument or investment should contact DNB Markets, Inc., 200 Park Avenue, New York,NY 10166-0396, telephone number +1 212-551-9800.
In Canada The Report has been distributed in reliance on the International Dealer Exemption pursuant to NI 31-103 subsection 8.18(2) and subsection 8.18(4)(b). Please be advised that: 1. DNB Bank ASA (DNB Markets) and DNB Markets, Inc. are not registered as a dealer in the local jurisdiction to make the trade. We provide our services in Canada as an exempt international dealer. 2. The jurisdiction of DNB Bank ASA (DNB Markets) and DNB Markets, Inc.'s head office is Norway. 3. There may be difficulty enforcing legal rights against DNB Bank ASA (DNB Markets) and DNB Markets, Inc. because all or substantially all of their assets may be situated outside of Canada. 4. The name and address of the agent for service of process for DNB Bank ASA (DNB Markets) and DNB Markets, Inc. in the local jurisdiction is: Alberta: Blake, Cassels & Graydon LLP, 855 - 2nd Street S.W., Suite 3500, Bankers Hall East Tower, Calgary, AB T2P 4J8. British Columbia: Blakes Vancouver Services Inc., 595 Burrard Street, P.O. Box 49314, Suite 2600, Three Bentall Centre, Vancouver, BC V7X 1L3. Manitoba: Aikins, MacAulay & Thorvaldson LLP, 30th Floor, Commodity Exchange Tower, 360 Main Street, Winnipeg, MB R3C 4G1. New Brunswick: Stewart McKelvey, Suite 1000, Brunswick House, 44 Chipman Hill, PO Box 7289, Station A, Saint John, NB E2L 2A9. Newfoundland and Labrador: Stewart McKelvey, Suite 1100, Cabot Place, 100 New Gower Street, P.O. Box 5038, St. John's, NL A1C 5V3. Nova Scotia: Stewart McKelvey, Purdy's Wharf Tower One, 1959 Upper Water Street, Suite 900, P.O. Box 997, Halifax, NS B3J 2X2. Northwest Territories: Gerald Stang, Suite 201, 5120-49 Street, Yellowknife, NT X1A 1P8. Nunavut: Field LLP, P.O. Box 1779, Building 1088C, Iqaluit, NU X0A 0H0. Ontario: Blakes Extra-Provincial Services Inc., Suite 4000, 199 Bay Street, Toronto, ON M5L 1A9. Prince Edward Island: Stewart McKelvey, 65 Grafton Street, Charlottetown, PE C1A 1K8. Québec: Services Blakes Québec Inc., 600 de Maisonneuve Boulevard Ouest, Suite 2200, Tour KPMG, Montréal, QC H3A 3J2. Saskatchewan: MacPherson, Leslie & Tyerman LLP, 1500 Continental Bank Building, 1874 Scarth Street, Regina, SK S4P 4E9. Yukon: Grant Macdonald, Macdonald & Company, Suite 200, Financial Plaza, 204 Lambert Street, Whitehorse, YK Y1A 3T2.
In Brazil The analyst or any close associates do not hold nor do they have any direct/indirect involvement in the acquisition, sale, or intermediation of the securities discussed herein. Any financial interests, not disclosed above, that the analyst or any close associates holds in the issuer discussed in the report is limited to investment funds that do not mainly invest in the issuer or industry discussed in the report and the management of which these persons cannot influence.