- By Region
Souring investor sentiment towards some of the biggest figures in shipping appears to be spreading from oil tanker operations to their less obviously troubled ventures, according to data on heavily short-sold stocks.
Figures from Data Explorers, the research firm, show three companies associated with Peter Georgiopoulos, founder and chairman of General Maritime, the troubled New York-listed tanker operator, among the 15 shipping shares with the highest proportions out on loan. Investors borrow shares to make profits by selling them before buying them back more cheaply after an expected price fall.
Another two companies associated with John Fredriksen, founder of loss-making Frontline, feature on the list, along with Excel Maritime, a dry bulk company which has the same largest shareholder as Torm, a troubled product tanker operator.
Paul Slater, chairman of First International, a financial adviser to shipping companies, said some of the short-term traders who held the stocks involved would undoubtedly be making connections between companies based on the personalities involved.
“These guys aren’t looking at fundamentals,” he said. “They’re looking at rumour and movement.”
Overseas Shipholding Group, heading the list, is one of many big tanker operators struggling in the face of charter rates that are mostly too low to cover companies’ costs. More than 39 per cent of its shares are on loan.
Other tanker operators on the list include Nordic American Tankers, Knightsbridge Tankers and both Frontline and General Maritime.
But Genco Shipping & Trading, a dry bulk ship operator that Mr Georgiopoulos chairs, appears at number two despite having reported, unlike many rivals, a third-quarter profit. Aegean Marine Petroleum Network, an operator of specialist tankers for bunker fuel that Mr Georgiopoulos chairs, appears at 14.
Basil Karatzas, chief executive of New York-based Karatzas Marine Advisers, said investors feared a “contagion effect” between related companies.
Excel Maritime Carriers, fourth on the list, is closely associated with Gabriel Panayotides, who owns about 40 per cent of the shares. Mr Panayotides is also the largest shareholder in Copenhagen-based Torm, a heavily loss-making operator of oil product tankers.
Meanwhile, Ship Finance International, founded by Mr Fredriksen and 11th on the list, charters 32 ships to Frontline, leading to fears about the effect on the company if Frontline can no longer pay.
None of the linked companies responded to requests to discuss the short selling. Herbjørn Hansson, chief executive of Nordic-American Tankers, said some investors’ ignorance of his company’s strong financial position might explain the short selling.