STX Pan Ocean fell as drop in Baltic Dry Index (BDI), worries over reports that company has defaulted on charter hire contract weigh. CIMB notes Lloyd's List has reported that dry bulk shipper had returned a chartered-in vessel 2 months early, ship owner has launched legal proceedings to recover lost charter income. "This development stocks our deepest fears, the scope of the problem could be massive," says broker; warns charter-in strategy at risk of generating large losses, latest development suggests STX Pan Ocean may have been caught out by falling freight rates, be paying more to rent chartered-in ships that it can get back in chartering them out. Broker downgrades stock to Underperform from Trading Buy, cuts target price to $0.89 from $1.64.
Forward curve doesn't offer any clues to possible rebound in Baltic Dry Index, which down another 6.7% overnight, says Imarex. "One of these days these numbers (forward freight agreements) will show promise - though today is not that day. More reports of falling ore prices and declining demand for steel can be readily found. Until that changes - I don't expect to see the futures shine any uplifting light on the (dry bulk) sector," says analyst in report. On bright side, Imarex says reports of Capesize ships being laid up in port, while obviously reflecting market weakness, are "part of the self-correcting mechanism that shipping markets - and all markets - possess."
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment