dnb markets, a leading provider of equity research in the
TRANSCRIPT
The Challenge
DNB Markets’ Shipping Team publish regular equity research reports on major shipping lines, including Maersk. Reports contain buy or sell recommendations based on their view of each line’s likely future earnings. DNB looks to create models of future earnings to support their recommendations, by using data sources available to them. Other data sources in the
market could not accurately forecast ship-ping lines’ earnings as they were either inaccurate or only had limited coverage (both geographically and by type of con-tract). DNB needed to find a better data source to be able to include accurate fore-casts in their reports.
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xeneta.com
DNB Markets, a leading provider of equity research in the maritime industry, creates consensus-beating forecasts using Xeneta’s data
Nicolay Dyvik
We are constantly looking for data that can have true market impact; Xeneta is the only source that provides this for container freight. It provides detailed, global coverage of both long and short-term rates, allowing us to provide research that accurately predicts changes in earnings for shipping lines. Having looked at all data providers available, we are very happy to have finally found one accurate and broad enough to provide value to our clients.
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xeneta.com
DNB subscribed to Xeneta, the world’s largest database of contracted ocean freight rates. Xeneta’s data covers all global trade lanes and includes both short and long-term rates. Xeneta’s data allows DNB to understand the global market and see changes in rates which will affect carriers earnings.
DNB built a model based on Xeneta’s data, which accurately (R2 = 0.93) predicted Maersk’s earnings historically. DNB can now use this model to forecast Maersk’s earnings before they are released to the
public, allowing them to provide better guidance in their research reports.
Xeneta’s data allows DNB to estimate Maersk’s average container rates across all their global corridors. Their model weights these averages by Maersk’s global volumes to produce an average container rate. Changes in this average can then predict changes in Maersk’s reported actual container rates, predicting changes in revenue, profit, and ultimately share price.
The Solution
Source: DNB Markets (forecast), Xeneta (historical), Maersk (historical)Source: DNB Markets (forecast), Xeneta (historical), Maersk (historical)
Xeneta-based rate index versus Maersk's actual
reported container rates including forecasts for
Q1 and Q2
Xeneta-based rate index model shows a tight
correlation with Maersk's actual reported rates
with an R2 of 0.93
Mae
rsk
actu
al ra
te (U
SD/F
FE)
DNB
Mar
kets
impl
ied
Mae
rsk
rate
inde
x ba
sed
on X
enet
a
2500
2100
1700
2015
- Q
1
2015
- Q
1
2015
- Q
1
2015
- Q
1
2016
- Q
2
2016
- Q
2
2016
- Q
2
2016
- Q
2
2017
- Q
3
2017
- Q
3
2017
- Q
3
2017
- Q
3
2018
- Q
4e
2018
- Q
4e
3000
2400
1800
Mae
rsk
rate
(USD
/FFE
)
DNB Markets implied Maersk rate index based on Xeneta
2200
2100
2000
1900
1800
1700
1600
1500
1800 1900 2000 2100 2200 2300 2400Maersk Rates
Maersk Forecast
DNB Markets implied Maersk forecast based on Xeneta
y = 0.67x + 474.68
R² = 0.93