UBS launches freight market investor index

Investment Bank UBS has launched the UBS Blue Sea Index (UBS-BSI), the first tradable investment index in the dry freight derivatives market.

The index will track the price of forward freight agreement (FFAs) for three different dry bulk carrier types, which each holds a different weighting: 50 % is allocated to the Panamax time charter index, 40% to Capesize and 10% to Supramax.

The dry (cargo) freight derivatives market has exploded in value in the past five years, going from $10 billion in value to a projected $150 billion in 2008, according to Ilija Murisic, executive director, hybrid derivatives trading at UBS.

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