Asia/Pacific News
CIMB: Regional Container Shipping Sector Downgraded Due to "Wasted Windfall" of Lower Bunker
Malaysia-based CIMB Research (CIMB) has downgraded the regional container shipping sector from “neutral” to “underweight”, attributing the move to carriers’ “wasted bunker windfall”, the Malaysian Insider reports.
“Fear is now the dominant emotion as carriers give away the benefits of lower bunker prices by way of aggressive capacity injections and rate competition,” said the CIMB report.
Forecasts for core earnings per share and target prices were reportedly reduced for all companies due to “weaker-than-expected” freight rates.
CIMB is said to have also reduced the rating on SITC International Holding Company shares from Add to Hold, and on Orient Overseas International (OOIL) shares from Add to Reduce.
“Neptune Orient Lines (NOL) remains a Hold, while China Shipping Container Lines (CSCL) is our top Reduce,” said CIMB.
In May, it was reported that NOL said low bunker prices helped cushion a net loss of $11 million for the company’s first quarter of 2015, an improvement on the $98 million net loss for the same period the previous year.
