Reports of the death of shipping research coverage at Deutsche Bank may have been a bit premature.
On the other hand, the extent of the coverage going forward remains in question.
Deutsche Bank managing director Craig Fuehrer told TradeWinds in a brief sideline interview at Marine Money Week in New York last week that the finance house “has not dropped shipping research”.
He said erstwhile shipping specialist Chris Robertson would continue to follow some LNG names that have been under his coverage.
Anything more than that remains under discussion within the bank, Fuehrer added.
The update comes after TradeWinds reported on 17 May that Deutsche Bank was poised to drop shipping research following the departure of Amit Mehrotra, who had led maritime coverage since he was recruited in 2014.
Mehrotra is on his way to UBS where he will carry out industrial research, which is not expected to include shipping names — at least for now.
Mehrotra had been a strong advocate for shipping coverage, although he had moved more heavily into related transport sectors such as rail and trucking by the spring of 2020, when Deutsche Bank slashed 10 of the 16 shipping names under his coverage.
The senior analyst hired Robertson from Jefferies in June 2020 to be his lieutenant, gradually entrusting him to do the heavy lifting even on shipping names that remained officially under his coverage.
On 17 May, Deutsche Bank said it was dropping coverage of 21 transport stocks, including Euronav, Frontline, Star Bulk Carriers, Global Ship Lease and a raft of companies in trucking and rail.
Those names, not coincidentally, exactly matched Mehrotra’s coverage list.
For his part, Robertson had lead coverage on Scorpio Tankers and International Seaways, as well as LNG players such as Excelerate Energy and New Fortress Energy. Nothing was said about any changes that coverage.
Fuehrer’s confirmation of a continued role in coverage of LNG stocks seems to bear out talk of a new role for Robertson that will include gas but also adjacent coverage areas within the energy sector.
Robertson is well-liked among public-company management teams in shipping, and TradeWinds understands that some there have gone to bat for him in a bid to see his research continued.
However, he is up against the relatively small market capitalisations and trading volumes of public shipowners compared with other industrial sectors — a factor that was stressed when Deutsche Bank culled shipping in 2020.
Even during peak markets for most operating sectors, the “scale” issue remains a challenge, as was borne out in a remark by Fuehrer during a discussion at the Marine Money event.
“The last thing the world needs is another $300m to $500m shipping company,” Fuehrer said on an investment panel, referring to an individual company’s market capitalisation.
He was speaking to shipping’s inability to gain serious attention from institutional investors and index funds because companies lack sufficient scale.
