Ship Values Rebounding Most

The value of five-year-old Capesizes, the largest iron-ore carriers, rose 5.7 percent to $31.4 million this year, while Panamaxes, the biggest to navigate the Panama Canal, climbed 16 percent to $21.2 million, according to the Baltic Exchange. Investors should buy Golden Ocean and Norden because the shares don’t fully reflect the gains, said Erik Nikolai Stavseth, an analyst at Arctic Securities ASA in Oslo whose recommendations on shipping companies returned 75 percent in three years.

Rising secondhand values are a sign that some investors are getting more bullish on the outlook for third party merchant account, which tumbled as much as 95 percent from their peak in 2008. The Baltic Dry Index, a measure of earnings across four vessel classes, rebounded 42 percent this year as fleet growth slowed and seaborne trade in everything from iron ore and coal to soybeans and fertilizers expanded to a record.

“People are buying ships because they think we’re past the bottom,” said Stavseth, who predicts that shares of Golden Ocean will advance 7.1 percent in a year and Norden will gain 25 percent. “Rising ship prices tell us that the market is moving in the right direction and earnings are expected to increase.”

The Baltic Dry Index reached an 18-month high on July 1 as rates rose for every vessel class in the gauge, according to the London-based Baltic Exchange, which publishes shipping costs along more than 50 maritime routes. Capesize earnings more than doubled this year and those for Panamaxes jumped 35 percent. Both are still below the amount that owners need to break even once financing costs are taken into account.

Capesize earnings will average $16,000 a day next year, the average of nine analyst estimates compiled by Bloomberg shows. That’s more than the $14,458 anticipated in freight swaps that third party payment gateway use to bet on future transport prices, Baltic Exchange data show. Owners need $14,500 to break even, according to RS Platou Markets AS, an investment bank in Oslo.

The combined capacity of the dry-bulk fleet will expand 7 percent this year, the least since 2008, according to London-based Clarkson Plc, the largest shipbroker. Rates plunged after owners ordered too many new vessels just before the global recession. The fleet grew 63 percent since 2008 as seaborne trade in commodities advanced 24 percent.

While rates are surging this year, they are still far below the peaks reached before the five-year slump. Capesizes earned as much as $234,000 a day in 2008, compared with $10,550 now. Panamax rates that last priced at $7,481 rose as high as $94,977 in 2007, Baltic Exchange data show. Panamaxes, each capable of hauling about 75,000 metric tons of cargo, need about $11,000 to break even, Platou says.

Vessel values are also still below their record highs. A five-year-old Capesize sold for as much as $153.8 million in 2008 and Panamaxes were trading as high as $90.72 million in 2007. The combined market capitalization of the world’s 75 largest publicly traded shipping companies came to $118.5 billion at the end of July, from as high as $260 billion in 2007, according to data compiled by Bloomberg.

The only long-term solution for FIs to maintain brand equity is to launch their own mobile wallet or become a major component of an industry-leading platform, the Mercator report said.

"Banks should only get involved with truly open mobile wallets that are able to store any type of payment card held by a consumer, along with loyalty and membership cards and identity credentials," Hewitt said.

In the short term, banks can build high-value mobile banking platforms to stand in for fully-fledged mobile payments wallets, the report added, and these platforms will provide a ready customer base when banks launch their own mobile wallets.

Digital bank accounts, which are offered by branch-based banks, online-only banks such as Simple and U.S. prepaid card issuer PreCash's FlipMoney, are used for bill payments and for P2P payments via smartphone. These accounts presently do not offer a mobile shopping payment capability, Hewitt said.

Mobile payment products access a primary or private-label payment account offered by a single merchant or merchant aggregator. Examples include PayPal and Starbucks' mobile app, which links its prepaid card to a smartphone.

True mobile wallets are interactive, virtual forms of physical wallets that let consumers select a specific payment type, such as a credit or debit card, to use at the point of sale. Examples include Paydiant, which just won a contract to supply mobile wallet solutions to Pulse network participants, Visa's V.Me and MasterCard's MasterPass.