Market Turm(Oil)

28 Aug 2015: Impact of the volatility in the equity markets on tankers.  Over the last two weeks, equity markets worldwide have sold off as investors ran for the exit. Over the last few days, many of the global stock indices have recovered some of their lost ground on the back of better economic news from China and the U.S. However, investors remain nervous. In the U.S., the stock market entered “correction” territory, i.e. stocks were down more than 10% from their highs. Shipping stocks suffered like everybody else. Most shipping stocks fell below Net Asset Value (NAV). Even companies with strong balance sheets and earnings were trading at a significant discount. It is too early to say whether the pullback will turn into a bear market (a 20% correction from peak to trough). But we should not look at the stock market in isolation. It is important to remember that the economy is not the same as the stock market. This is particularly true in countries like China where the stock markets are not as well developed. The key question is: what caused these stock market gyrations and will it spill over into the “real economy”? Download here