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P52288 Shipping Risk Management
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Shipping Risk Management

17 – 18 July 2019 | Mandarin Orchard Hotel, Singapore

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Past Delegate Special Discount*
MCF TRAINING GRANT IS AVAILABLE FOR ELIGIBLE PARTICIPANTS.
PLEASE REFER TO WWW.MPA.GOV.SG/MCF FOR INFORMATION.

overview

Key Learning Outcomes

  • Bunker market and bunker risk management; forward bunker contracts, hedging & trading
  • Sources of risks in shipping, and their hedging
  • Assess and compare risk management tools in Shipping (FFA vs CoA or Time Charter)
  • Principles and use of FFAs, its practicality and how they manage shipping risks
  • Practical examples on trading FFAs, modelling fleet’s exposure, and exercises on calculating flat rate and TCE
  • Analyse the options shipowners and charterers have to hedge their positions
  • Contracts and risk management
  • Bunker hedging tools
  • Know your exposure and understand freight positions and their roles in trading decisions

 Who Should Attend

This course is essential for Finance, Chartering, Fixtures, Risk and Claims Managers from

  • Ship Owners and Managers
  • Charterers
  • Brokers
  • Hedge Funds, Banks and Commodity Traders

Digital Badge

Upon completion of this training course, participants will earn a digital badge.

Earners of Shipping Risk Management Certificate have advanced-level understanding of legal, financial, contractual management in shipping and the competence to hedge against shipping risks. They have examined the various sources of risks (e.g Bunker rate, vessels supply & demand, freight market, interest rate); reviewed the freight markets (paper vs physical); compared across risk management tools in shipping (FFA, CoA, Time Charter); modelled fleet exposure and analysed their practicality.

Skills:
Shipping risk, FFA, Time charter, CoA, bunker hedging, fleet exposure, TCE, contract management, risk management, bunker derivatives, freight market, pricing and settlements, OTC.

Eligibility:
Attend and participate in the 2 full days of training course duration, led by the designated training expert

Available to:
Seminar attendees

Digital Badge FAQ >

trainer

Dr. Stavros Tsolakis

Visiting Professor, Singapore Management University; Vice President, DST Shipping Group

Agenda

THE SHIPPING CONTRACTS AND RISKS

  • Contracts
  • Sources of risks
  • Fundamentals of freight markets
  • Supply and demand of vessels
  • Market cycles and trading environment
  • Shipping trend observations in major commodities traded
  • Freight rates updates
  • Factors affecting volatility

SHIPPING RISK MANAGEMENT

  • Sources of risks
  • Risk management and use of derivatives in shipping
  • Comparison of risks across shipping segments
  • Freight risk management tools available
  • Financial risk management in shipping
  • Interest rate risk
  • Financing examples and sources of interest rate risk
  • Instruments to manage risks
  • Hedging interest rate risk using forwards and futures
  • Currency swaps and swapations
  • Interest rate caps, floors and collars
  • Case studies

UNDERSTANDING SHIPPING NATURAL HEDGE

  • Analyse the options shipowners and charterers have to hedge their positions.
  • Shipowners’ Traditional Strategies to Minimise Financial Risk

BUNKER RISK MANAGEMENT

  • Bunker market – how will it affect hedging
  • Fundamentals of bunker risk management in shipping
  • Bunker derivatives
  • Forward bunker contracts, hedging and trading
  • Options on bunker prices
  • Exercise

TIME CHARTER EQUIVALENT (TCE)

  • How to calculate?
  • Practical exercise

THE FREIGHT MARKET

  • The need for the development of freight futures concept
  • The Baltic Exchange Charts and how they are developed/ structured.
  • Potential Users of Futures Contracts
  • A shipowners decision making process in hedging against a freight fall
  • A charterers’ decision making process in hedging against freight increase
  • OTC Swaps
  • Cleared swaps
  • Analyse the different futures and forward contracts in shipping

OVERVIEW OF CURRENT FFA MARKETS

  • The function
  • Principles and use of FFAs
  • Overview of markets (dry vs wet)
  • Using FFA to cover exposures
  • Charterers’ strategies
  • Owners’ strategies
  • Setting up a clearing account
  • Initial margins and margin calls
  • Default and netting

CORRELATIONS

  • Between FFA routes and the Physical Market
    • Trade routes and contracts available
    • Deciding which contract to use
  • Between Paper and Physical – choosing the right period and volume

PRICING AND SETTLEMENTS

  • Baltic index
  • Daily mark to market (M2M)
  • Contract settlement
  • Exchanges – mechanism and futurisation
  • Clearing houses and exchanges

EXERCISE:

  • Comparison between future, forward and physical hedging tools
  • What to trade, when and why
  • Assess the future market in identifying price risk period
  • Using a traded contract – manage your own daily book. Mark to market and final settlement

FFA MARKET IN PRACTICE

  • The forward curves – firm and indicative
  • Bids and offers – price matching
  • OTC vs Screen Trading
  • Trade flow process – OTC Cleared and Exchange traded
  • General Clearing Merchants (GCMs) – their role and function

FFA TO COVER EXPOSURES – KEY STRATEGIES FOR

  • Charterers
  • Owners
  • Traders

when & where

17 - 18 Jul 2019

Mandarin Orchard Singapore, by Meritus
333 Orchard Road, Singapore 238867
Tel: +65 6831 6062 | Fax: +65 6737 3130
Mobile No.: +65 8298 9442

Contact Person: Tan Ai Li
Email: aili.tan@meritushotels.com
Website: www.meritushotels.com

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