SOM008 – Ship Financing & Risk Management
Master of Science in Shipping Operations and Management
Core Course
SOM008 – Ship Financing & Risk Management
Course Unit Code: SOM008
Type Of Unit: Core
Level of Course Unit: 2nd cycle
Year of Study: -
Semester: -
Number of ECTS Credits: 10
Class Contact Hours: -
Mode of Delivery
Distance Learning
Prerequisites
None
Course Objectives
The objective of this course is to provide students with the necessary tools that will help them understand the use and application of financial instruments in the shipping industry. This includes estimation of costs and revenues, investment appraisal and the financial performance of shipping firms. Moreover, given the capital-intensive nature of the industry, particular emphasis is given on the various financing methods, such as bank financing, capital markets financing (through equities and/or bonds), and other alternative forms of financing, such as through hedge funds and private equity funds. In addition to the above, the cyclical and volatile nature of the industry, which implies extensive fluctuations in freight rates and ship prices makes the use of risk management tools crucially important to shipping companies. As such, the course also focuses on shipping- risk management tools, such as shipping derivatives, which have been developed to efficiently manage risks, emanating from fluctuations in freight rates, vessel prices, interest rates and foreign exchange rates, amongst others.
Learning Outcomes
- Obtain a thorough understanding of the workings of the shipping markets from a managerial finance perspective.
- Develop analytical and other generic skills, which will facilitate the rigorous analysis of financial decision-making in the shipping industry.
- Understand and measure the risk-return trade-offs and evaluate the sources of business and financial risks in the shipping industry.
- Implement different hedging strategies with the use of derivatives products in shipping in order to manage shipping-related risk exposures and be in a position to price such shipping derivatives.
- In-depth and holistic understanding of shipping investment and finance, including the management of risks emanating from the shipping industry. Familiarization with financial instruments that can be used to improve the investment, financing and risk management decisions of the shipping firm.
- Develop a good and solid understanding of the main aspects and forces that shape the modern world of shipping investment and finance.
- Know how various risk factors in the shipping industry can affect the revenues and costs of a shipping firm. Know what financial instruments may be used to manage such factors.
- Understand the options available to the financial manager of a shipping firm in the context of the investment and financing decision-making process.
- Understand the main operational and financial risks that a shipping firm might face, as well as how financial instruments can be used to mitigate such risks.
Course Content
Course Features
Planned learning activities and teaching methods
Audio-visual lectures
Exercises
Assignments
Extensive readings of the international literature
Live sessions
Assessment methods and criteria
30% 2 Assignments*
70% Final Examination
Language of Instruction
English
*Exact details regarding the nature of the assignments, as well as their deadlines, will be provided at the beginning of the course
Readings
Textbooks:
1. Brealey, R., Myers, S. and Allen, F. (2005), Corporate Finance, 8th Edition, McGraw-Hill Irwin.
2. Fight, A. (2004), Syndicated Lending, Butterworth-Heinemann Ltd.
3. Grammenos, C.T. (2010). The Handbook of Maritime Economics & Business. Informa Law from Routledge. ISBN 978-1-84311-880-0.
4. Kavussanos, M. and Visvikis, I (2011): Theory and Practice of Shipping Freight Derivatives, Risk Books, Incisive Media, UK.
5. Kavussanos, M. and Visvikis, I (2016): The International Handbook of Shipping Finance: Theory and Practice, Palgrave Macmillan UK.
6. Kavussanos, M. and Visvikis, I. (2006), Derivatives and Risk Management in Shipping, 1st Edition, Witherbys Publishing and Seamanship International, UK.
7. Kavussanos, M., Visvikis, I. and Tsouknidis, D. (2019), Derivatives and Risk Management in Shipping, 2nd Edition, Forthcoming, UK.
8. Nomikos, N. K. and Alizadeh, A. (2009) Shipping Derivatives and Risk Management, Palgrave MacMillan, London
9. Panayides Ph. M. (2002), Recent Developments in International Shipping Finance, London: Informa Publications.
10. Stopford, M. (2009), Maritime Economics, 3rd Edition., London: Routledge.
11. Visvikis, I and Panayides, P. (2017): Shipping Operations Management, WMU Studies in Maritime Affairs Book Series, Springer, Germany.
Journals (research papers):
Alexandridis, G., Satya, S., Song, D.W. and Visvikis, I. (2018) Shipping risk management practice revisited: a new portfolio approach, Transportation
Research A, 110, 274-290.
Alexandridis, G., Kavussanos, M.G., Kim, C.Y., and Tsouknidis, D.A. and Visvikis, I. (2018). A survey of shipping finance research: Setting the future research agenda, Transportation Review Part E, 115, pages 164-212.
Carisa K.W. Yu, Tsz Leung Yip & Siu Kai Choy (2019) Optimal portfolio choice for ship leasing investments, Maritime Policy & Management, 46:7, 884-900
Kavussanos, M.G. and Tsouknidis, D.A. (2016) Default risk drivers in shipping bank loans, Transportation Research E, 94, pp, 71-94.
Moutzouris, I.C. and Nomikos, N.K. (2019) Earnings yield and predictability in the dry bulk shipping industry, Transportation Research E, 125, pp. 140-159
Nomikos, N.K. and Alizadeh, A. (2011) An investigation into the effect of risk management on shipping investment and profitability, Chapter 7, Cullinane, K. (ed) The International Handbook of Maritime Economics (pp. 121-143), Edward Elgar, UK
Papapostolou, N.C, Pouliasis, P.K., Nomikos, N.K. and Kyriakou, I. (2016), Shipping investor sentiment and international stock return predictability, Transportation Research E, 96, pp. 81-94.
Papapostolou, N.C, Nomikos, N.K., Pouliasis, P.K. and Kyriakou, I. (2014), Investor sentiment for real assets: The case of dry bulk shipping market, Review of Finance, 18(4), pp. 1507-1539.
English (UK) 
Ελληνικά