The IMO’s impending emissions regulations are the talk of the shipping industry.
But Wall Street? Not so much.
Neither Deutsche Bank’s Amit Mehrotra nor Wells Fargo’s Mike Webber believe investors are taking scrubbers into account when valuing shipping stocks.
“I do think in some point scrubbers will play a role in equity valuations, but it’s probably wishful thinking for that to be the case now,” said Webber, speaking on a panel at TradeWinds’ IMO 2020 Disruption Forum Thursday in New York.
Mehrotra said it was tough to figure out how scrubbers should be valued.
He said scrubbers were a debit to a company's capital structure, but it was unclear whether or not they adjust the gross asset value.
“We’re not sure if it’s a depreciating asset," Mehrotra said.
Many shipowners have chosen scrubbers to comply with the IMO's coming regulations, allowing them to still burn high sulphur fuel. Others have committed to using the potentially-more-expensive low sulphur fuel or liquid natural gas.
The move toward scrubbers, Mehrotra said, has actually had a negative impact on those companies's stocks.
Webber noted that investors he hears from generally do not have strong opinions one way or another on the technology, and the ones that do are usually sold on it by shipowners.
“There are bigger macro factors in play at the moment," he said.
