Morgan Stanley is looking to charter more Panamax dry bulk ships to expand in a business it entered this summer, shipping sources said on Friday.
In August, the investment bank snapped up two Panamax vessels for three- to five-month charters, marking its entry into physical dry bulk freight chartering. Sources estimated that Morgan Stanley's total charters numbered anywhere from four to eight vessels.
A Morgan Stanley spokesman had said previously the entry into the physical dry bulk freight market was a natural progression for the bank, which has been in the dry freight derivatives market since 2002. He declined to comment on the expansion plan on Friday.
"Morgan Stanley is now in the market inquiring about short-term Panamax charters of one year and long-term charters of 10 years with purchase options," a shipping source said. It was not known how many more ships Morgan Stanley was hoping to charter in total. With stronger freight rates compared with August, Morgan Stanley is reaping profits from re-chartering out its ships in the spot market, sources said. The Baltic Exchange Panamax Index was pegged at 4,349 points, compared with 3,269 points on August 8.
"Morgan Stanley has a long-term strategy. They are in the market for the long haul," said a US-based ship broker, who played down the recent profits. "Morgan Stanley knows what it is doing. It has an ex-Cargill dry bulk person working for them now."
The expansion in the dry bulk business mirrors the sharp increase in Morgan Stanley's oil tanker fleet size, he said. In July, Morgan Stanley fixed 11 time-charter 47,000-tonne capacity clean tankers, and seven ice-class Capital tankers with the same capacity each.