Globally 2016 has seen one of the toughest freight markets with heightened delinquency of ship-owners/operators.
This period has been a great learning experience with significant lessons on risk containment.
Change in cargo flow and trade patterns had some impact on fleet utilisation which has been below long-term average, as tonne-mile increase in cargo volume has been slow to materialize.
Optimism in 2017 is based on gradual increase in tonne-mile trade with BWM (Ballast Water Management) regulations coming into force from Sept/ 2017.
Long seen as a place of safety in times of turmoil, the US Dollar has regained its safe haven appeal.
Soaring oil prices, driven by upheavel in the Middle East and elevated volatility have impacted risk appetite for investment.
A flight to the dollar customarily demonstrates increased risk aversion. A weak US Dollar usually boosts global trade.
Thus the US Dollar plays a pivotal role in Global Trade.
Domestically we have an internal demand driven economy, where expect utilization rates of the domestic industry to improve gradually with higher demand growth. Investment cycle with manufacturing industry typically kick-in when capacity utilization is consistently above 80% for couple of quarters.
It is therefore important that we develop our own prognosis based on knowledge and context.
We should be able to take decisions for the right reasons. Navigate your way through uncertainties without expectation "Blessed is he who expects nothing, for he shall never be disappointed." Alexander Pope (Poet)
Source: Shri. Sushil Saigal, F.C.A, F.I.C.S.
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