Investment and trading strategies in the maritime sector: an application to the secondhand containership market
Georgoudakis, D.; Syriopoulos, T.; Sys, C. (2023). Investment and trading strategies in the maritime sector: an application to the secondhand containership market. WMU Journal of Maritime Affairs 22: 59-89. https://dx.doi.org/10.1007/s13437-022-00289-9
In: WMU Journal of Maritime Affairs. World Maritime University: Heidelberg. ISSN 1651-436X; e-ISSN 1654-1642, more
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| Author keywords |
Second-hand containership prices; Time-charter earnings; Stationary bootstrap; Investment strategies; Buy-and-hold strategies; Trading strategies |
| Authors | | Top |
- Georgoudakis, D., more
- Syriopoulos, T.
- Sys, C., more
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| Abstract |
As shipping market players operate in a competitive and volatile business environment, their highly capital-intensive investment decisions to target value-generating projects are exposed to critical risks. Therefore, the paper investigates the efficiency of investment strategies based on the combination of technical trading rules and fundamental analysis in selling and purchasing ships in the container shipping market. Using historical datasets of second-hand vessel prices and time-charter rates from October 1996 to June 2021, long-run cointegrating implications and short-run causality spillover effects are examined for three groups of containerships, distinguished by their transportation capacity, viz. 725 TEUs, 1700 TEUs, and 3500 TEUs. In addition, the moving average trading rules are used to indicate the timing of investment or divestment decisions through the analysis period. The results for vessel prices and earnings for 3500 TEU containerships appeared to be more volatile compared to smaller ships (725 TEUs and 1700 TEUs), while time-charter earnings are seen to exert an impact on second-hand prices across all vessel types. Moreover, due to higher volatility, the trading strategies based on price-earning ratios significantly outperform the buy-and-hold strategies for the 3500 TEU and the 1700 TEU containerships. On the contrary, the decision to buy-and-hold smaller container ships (725 TEU) yields higher profits than the active sale and purchase strategy. The insights provided in this paper can be used by multiple stakeholders, such as liner operators, investors, lessors, and researchers. |
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