Of the 12 listed carriers that Drewry has been tracking, only NOL And Wan Hai have managed positive returns of 12% and 9%, respectively on a one-month basis, while on a three-month basis all operators registered negative returns.
The consultants believe the negative return on share prices largely reflects a gloomy outlook for the industry, which is suffering from overcapacity, low demand and volatile freight rates.
NOL’s Stock performance generated a return of 12% in July, 2015 – the most among all operators under its coverage, primarily based on the news that the company was up for sale. Operationally, NOL posted a net profit of US$890 million in Q2, 2015, compared with a loss of $54 million last year, largely due to the $887 million gain from selling APL Logistics.
All Three Japanese Operators – MOL, NYK And K – Line – Registered negative returns of 1-4% in July, 2015. Three-month returns were also disappointing for all operators with negative returns of 9-12%.
Despite the recent precipitous drop, Drewry believe that share prices could rebound sharply as a few media reports indicate that China Is now seriously considering the merger of CSCL and Cosco Group amid a broader push to streamline state-owned enterprises.
The negative catalysts are said to be lower freight rates with more pronounced overcapacity and disappointing global demand.
Weaker-than-expected progress in the company’s oil and terminal Businesses has also negatively impacted its returns.
(Source: Drewry Equity Research)