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Navios Maritime Partners L.P. Message Board

  • jj27713 jj27713 May 11, 2012 4:50 PM Flag

    NMM and Greece/Euro

    This may have been discussed recently, (I didn't run across anything) but how insulated in Navios from the current drama in Greece? If Greece stays with the bloc is Navios immune from austerity and debt stuff? If Greece refuses austerity measures and/or splits from the bloc how does Navios fare?

    If Europe is in a deeper recession by the end of the year how much is Navios affected ie. does it do much of its shipping importing to the Euro zone or does it contract with countries mostly outside the Euro zone (like Americas and Orient)?

    The distrbution is getting fairly enticing if it can hold at present levels...

    Thanks in advance for any thoughts.

    JJ

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    • I wish that Greece would just get OUT of the Euro. Its not like this is something that hasn't happened before and its not like this will destroy the Euro. In fact it would strengthen the Euro. Just the fact that Greece is teetering is keeping all of Europe hostage and causing pain for world markets. Unlike other European countries, Greece cannot fix their problems. The stories I have heard about how Greek individuals and firms avoid paying taxes is astounding.

      The markets are pricing in a Greek bailout but its not totally priced in yet. When Greece finally bails, the stock market will have it priced in and markets will rebound nicely.

      Who would a Greek bailout hurt. Creditors would certainly be hurt which is why I own no financial stocks presently (except for 1 US REIT).

      A bailout of the Euro would hurt Greece terribly but would make it a very cheap place to visit as the drachma would be hit hard. (If I lived in Greece I would make sure that my savings were in US dollars or gold/silver NOW). The drachma would spiral down like the $Zim.

      How can NMM be impacted? Well it might be difficult to obtain credit but that is already happening in Europe. Financial institutions are already pulling back on financing new ships due to the current supply glut. That is probably a good thing anyway.

      Well that's my take. Also, I am glad that NMM price is falling as I would like to add to my position at < $13.

    • To answer your other question, about exposure to Europe in general, keep in mind that they are well insured against couterparty risk. However, the insurance company is some quasi-governmental Belgian organization (not sure exactly how that works), so if all of Europe actually fell completely apart there might be some risk that their insurance company wouldn't be able to come through.

      However I consider that scenario to be very unlikely.

      Regarding the geographical distribution of their counterparties, have a look at their latest slide presentation.

      http://navios-mlp.irwebpage.com/files/Navios_Q1_2012_Partners_Earnings.pdf

      • 1 Reply to hogsheadofbeer
      • Thanks for your reply, hog.

        I don't really know too much about this company yet, but I did purchase a couple thousand shares based on similar feelings in your first paragraphs.

        It may well be that it will sag further in sympathy with the 'Greek' thing and, indeed, if there is a global slowdown underway. However, it is just about a third of where I would like to be if I keep it so my small position is not concerning while I investigate it further as a dividend play. It will probably take another couple quarters to see how Europe financials and politics will play out and at least the same to see how world shipping rates hold up.

        Regards,

        JJ

    • NMM is a Marshall Islands limited partnership. It's books are all in USD. I believe that it also does business primarily in USD.

      Personally, I don't think anything that happens with the Greek economy will have a substantial effect on their actual business, although their stock would likely go down quite a bit due to their association with Greece.

      Keep in mind though that their headquarters are in Greece, and many of their personnel are Greek, so I imagine that a disruption of the Greek economy could have some effect, but I believe that it would be small.

 
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