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SHIPPING MARKET UPDATE (OCTOBER 2014)
Supply side pressure has eased in across segments
Despite fresh ordering in the last 6 months, the order book to fleet ratio in
the dry bulk segment has improved to 22.5% from 23.5% QoQ and from
30% YoY, while in dirty tanker segment the ratio has remained flat at 12%
QoQ and improved from 19% YoY. Even asset prices across segments have
improved ~2% QoQ and ~10% YoY which would help the NAV of shipping
companies. With demand improving especially from China for bulk and for
crude from Europe and US, the shipping markets have improved in the last 2
quarters and expected to move up from current level. Currently we estimate
scrapping to be equal to or more than new order placement which is
positive for the sector. With continuous reduction in global shipping order
book, we expect stable shipping market for H2FY15 with shipping
companies including SCI and GE Shipping reporting improved financial
performance. We recommend investors to BUY SCI (Target price Rs.77) and
BUY GE Shipping (Target Price. Rs.450).
�� India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details ��
��
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SHIPPING MARKET UPDATE (OCTOBER 2014)
Supply side pressure has eased in across segments
Despite fresh ordering in the last 6 months, the order book to fleet ratio in
the dry bulk segment has improved to 22.5% from 23.5% QoQ and from
30% YoY, while in dirty tanker segment the ratio has remained flat at 12%
QoQ and improved from 19% YoY. Even asset prices across segments have
improved ~2% QoQ and ~10% YoY which would help the NAV of shipping
companies. With demand improving especially from China for bulk and for
crude from Europe and US, the shipping markets have improved in the last 2
quarters and expected to move up from current level. Currently we estimate
scrapping to be equal to or more than new order placement which is
positive for the sector. With continuous reduction in global shipping order
book, we expect stable shipping market for H2FY15 with shipping
companies including SCI and GE Shipping reporting improved financial
performance. We recommend investors to BUY SCI (Target price Rs.77) and
BUY GE Shipping (Target Price. Rs.450).
�� India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details ��
��
LINK
http://www.kotaksecurities.com/pdf/dmb/MorningInsight09102014rj.pdf
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