Ship owning: an investment warning? – The Property Chronicle
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Ship owning: an investment warning? Our insider looks at whether investing in shipping is 'as safe as houses'

Investor's Notebook

Container ship in port


Shipping carries over 90% of world trade. Until anti-gravity transport is invented nothing will replace it. This island race has salt water and shipping in our veins and history. As befits our special relationship with the Creator it is obvious that he is a shipping man. He covered two thirds of the Earth in water and put the natural resources as far away as possible from where they are needed. As Britannia ruled the waves so London became the maritime center of the world and still retains an international influence completely disproportionate to the actual physical size of British controlled shipping. London still has the finest shipping infrastructure in the world. However, the momentum as with so many other businesses is moving East. Singapore, with financial inducements and recently the takeover of the Baltic Exchange, is making serious and realistic progress to threaten London’s long term maritime position.

It should logically follow that ship owning companies are therefore as safe as houses for investment. But logic is not a major component of the shipping industry. Direct access to private investment in shipping is hard to find. World ship owning has been and still is dominated by principal-led independent family owned companies, Greeks still very much to the fore. The Golden Greek shipowners of the era past, so beloved by the society and scandal pages, actually laid very solid commercial templates for their heirs and many successors. Little outside investment opportunity was available. Their finance was principally mortgage based bank loans secured on their ships themselves. Equity in their owning and operating companies, domiciled tax advantageously, was not readily shared or offered.

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