The effectiveness of freight derivatives in managing a ship-operator's systematic and unsystematic risks
The shipping market is notorious for its volatility and risks, with prices in the shipping market fluctuating substantially over short periods of time. While risks do come along with any business venture, the impacts are more pronounced and frequent in the shipping market. Coupled with stiff compet...
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| Other Authors: | |
| Format: | Final Year Project (FYP) |
| Language: | English |
| Published: |
2010
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| Online Access: | http://hdl.handle.net/10356/39593 |
| _version_ | 1826114115036250112 |
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| author | Chen, Jamaine Ying Ling. |
| author2 | School of Civil and Environmental Engineering |
| author_facet | School of Civil and Environmental Engineering Chen, Jamaine Ying Ling. |
| author_sort | Chen, Jamaine Ying Ling. |
| collection | NTU |
| description | The shipping market is notorious for its volatility and risks, with prices in the shipping market fluctuating substantially over short periods of time. While risks do come along with any business venture, the impacts are more pronounced and frequent in the shipping market. Coupled with stiff
competition, where only the most adept ship-owners survive in the long-run, the importance of risk management tools have taken on a new meaning where profit maximizing market participants who
are more adept at actively managing the unsystematic risks enable them to reduce the risk and thus, a higher stability in their earnings. Today, a myriad of hedging tools exist for a ship-operator, with the
most recent development being freight derivatives. The paper‟s objective is to determine the effectiveness of forward freight agreements in hedging the systematic and unsystematic risks faced by
a ship-operator with tonnages primarily operating on the spot market by comparing with the traditional methods of hedging. This will be done through the creation of a shipping asset portfolio model which simulates a real-life ship-operator‟s portfolio. This research is of high commercial significance, as the findings can demonstrate how freight derivatives complement the highly capital
intensive business of shipping in terms of performance and utility – thereby providing a vital reference for the ship-operator. |
| first_indexed | 2024-10-01T03:34:11Z |
| format | Final Year Project (FYP) |
| id | ntu-10356/39593 |
| institution | Nanyang Technological University |
| language | English |
| last_indexed | 2024-10-01T03:34:11Z |
| publishDate | 2010 |
| record_format | dspace |
| spelling | ntu-10356/395932023-03-03T17:25:57Z The effectiveness of freight derivatives in managing a ship-operator's systematic and unsystematic risks Chen, Jamaine Ying Ling. School of Civil and Environmental Engineering Soh Woei Liang DRNTU::Engineering::Maritime studies::Maritime management and business The shipping market is notorious for its volatility and risks, with prices in the shipping market fluctuating substantially over short periods of time. While risks do come along with any business venture, the impacts are more pronounced and frequent in the shipping market. Coupled with stiff competition, where only the most adept ship-owners survive in the long-run, the importance of risk management tools have taken on a new meaning where profit maximizing market participants who are more adept at actively managing the unsystematic risks enable them to reduce the risk and thus, a higher stability in their earnings. Today, a myriad of hedging tools exist for a ship-operator, with the most recent development being freight derivatives. The paper‟s objective is to determine the effectiveness of forward freight agreements in hedging the systematic and unsystematic risks faced by a ship-operator with tonnages primarily operating on the spot market by comparing with the traditional methods of hedging. This will be done through the creation of a shipping asset portfolio model which simulates a real-life ship-operator‟s portfolio. This research is of high commercial significance, as the findings can demonstrate how freight derivatives complement the highly capital intensive business of shipping in terms of performance and utility – thereby providing a vital reference for the ship-operator. Bachelor of Science (Maritime Studies) 2010-06-01T04:01:56Z 2010-06-01T04:01:56Z 2010 2010 Final Year Project (FYP) http://hdl.handle.net/10356/39593 en Nanyang Technological University 151 p. application/pdf |
| spellingShingle | DRNTU::Engineering::Maritime studies::Maritime management and business Chen, Jamaine Ying Ling. The effectiveness of freight derivatives in managing a ship-operator's systematic and unsystematic risks |
| title | The effectiveness of freight derivatives in managing a ship-operator's systematic and unsystematic risks |
| title_full | The effectiveness of freight derivatives in managing a ship-operator's systematic and unsystematic risks |
| title_fullStr | The effectiveness of freight derivatives in managing a ship-operator's systematic and unsystematic risks |
| title_full_unstemmed | The effectiveness of freight derivatives in managing a ship-operator's systematic and unsystematic risks |
| title_short | The effectiveness of freight derivatives in managing a ship-operator's systematic and unsystematic risks |
| title_sort | effectiveness of freight derivatives in managing a ship operator s systematic and unsystematic risks |
| topic | DRNTU::Engineering::Maritime studies::Maritime management and business |
| url | http://hdl.handle.net/10356/39593 |
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