Deutsche Bank has cut its shipping coverage by about a quarter as it reshuffles priorities for its analysts.
The cuts have seen the German bank drop research coverage on five of the 21 shipping names currently in its portfolio.
The five shipping names culled comprise: Ardmore Shipping, Capital Product Partners, Seaspan, Teekay Corp and Teekay Tankers.
But with 16 companies remaining, the reduction should not be seen as a souring on the sector more broadly, a source indicated.
Deutsche Bank said it would continue to cover: Diana Shipping, Dynagas, Eagle Bulk Shipping, Euronav, Frontline, GasLog, GasLog Partners, Genco Shipping & Trading, Golar LNG, Golar LNG Partners, Navios Maritime Acquisition Corp, Navios Maritime Partners, Scorpio Bulkers, Scorpio Tankers, Star Bulk Carriers and Teekay LNG.
In November, the bank took up coverage of two new industrial sectors — oilfield services and building products and materials.
The expansion placed a bigger workload on the four-man New York analyst team led by Amit Mehrotra, who spearheads shipping coverage. The trim of shipping names is seen as a response to that expansion.
It has been a tumultuous year both for banks’ research coverage of shipping and for Deutsche Bank in particular.
As TradeWinds reported in July, Mehrotra and his analyst team survived a massive restructuring that saw Deutsche Bank eliminate 18,000 jobs. Central to their retention was the bank’s assessment of shipping as a priority sector.
“While we are clearly undergoing significant transformation of our business model, one thing that is not changing is the importance that DB [places] on equity research," Mehrotra said in an email to clients at the time.
"To this end, my franchise remains firmly intact, along with the support of an institutional research sales infrastructure.”
Prior to Deutsche Bank’s decision, it had been a rough year for shipping as several banks turned their backs on the sector.
In late June, JP Morgan became the sixth bank in recent months to fully or partly dump shipping coverage, following on from Credit Suisse, UBS, Seaport Global Securities, the Maxim Group and fellow bulge-bracket firm Morgan Stanley.
At the same time, a handful of players have made a countercyclical move into the space, including BTIG, Berenberg Capital Markets , B Riley FBR and Noble Capital.
Prominent Wells Fargo analyst Michael Webber also made a jump from that bank to form his own shop: Webber Research & Advisory.
Some who remain shipping analysts have had to take on coverage in adjacent industries in order to get by. Even before the recent expansion, Mehrotra and his team were covering trucking and logistics, for example.
