Norwegian fund manager Joakim Hannisdahl has cut his exposure to VLGC shipping with rates at elevated levels but an extensive orderbook pending.
The former Cleaves Asset Management (CAM) boss said in an update on his private portfolio that he sold his 5% long position in Singapore owner BW LPG on Wednesday.
He has simultaneously entered into a 5% short position, in effect betting that the stock will drop in value.
Hannisdahl said the VLGC orderbook stands at around 22% of the existing fleet, with an estimated 84% of this tonnage to be delivered between October 2022 and January 2024.
“This means an estimated 10% effective supply growth in 2023 and another 7% in 2024,” he said.
“Although I also expect a strong 7% demand growth in 2023 and 4% in 2024, it is not enough to keep fleet utilisation at similar levels as seen in 2022.”
Spot rates stand at a “stellar” $133,000 per day from the Middle East Gulf, with cash break-even around $25,000, Hannisdahl said.
But he sees “significant downside risk” to spot and time charter rates going into the first quarter of 2023 and extending into the second quarter.
“It was always my plan to stay long [on] VLGCs into Q4 due to energy market dynamics, but also the plan [was] to short if VLGC shares came close to historical high net asset value (NAV) pricing and if spot rates reached $100,000 per day,” Hannisdahl said.
BW LPG’s NAV now stands at 80% of its share price and spot rates have exceeded his expectations.
Sticking to the plan
“I follow my plan accordingly,” the investor added.
Shipowners are paying up to $2m for the privilege of jumping lengthy queues at the Panama Canal, BW LPG revealed this month.
Demand for transit slots has “exploded”, it told investors.
The Panama Canal Authority (ACP) offers a limited number of reserved crossing times via auctions.
Last year, the ACP said the base auction amount for a neo-panamax slot was $93,500.
BW LPG chief executive Anders Onarheim told the call that waiting times at the canal are more than 20 days, tying up gas vessels.
Hannisdahl has no investments in LNG carriers, car carriers, container ships or bulkers.
Just over one-third of his fund is invested in tanker names such as Euronav, DHT, Hafnia and Frontline. LPG makes up 5%.
The rest is invested in US dollars and Norwegian krone.
Hannisdahl resigned from CAM in October, citing irreconcilable differences. His own Gersemi Asset Management company is being launched with in the next three to six months.
Cleaves Securities obtained an injunction to stop him marketing his new venture to former clients until 31 December, but this was overturned.
Further legal action could follow after the split.
