Drewry: Shipping Stocks Drop in Reaction to Market

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According to the latest Equity Research report released by Drewry, August saw Korean stocks outperforming the rest with both HMM And Hanjin delivering positive returns of 36% and 9%, respectively.

NOL’s stock generated a negative return of 11% in August, 2015 – the second biggest fall after Wan Hai.

Drewry believe the market reacted to the capacity cuts recently announced by the G6 alliance, which NOL is a part of. Members of the G6 Alliance, in mid-August, announced additional four void sailings in their Asia-Europe trade-lane in response to changes in market demand.

All three Japanese operators – MOL, NYK And K-line, registered negative returns of 8%, 6% and 3% in August, respectively.

Three-month returns were also disappointing with negative returns ranging from 12% to 19%. Yet, operationally, the tide could turn favourably in the second half for the Japanese carriers, on the strength of both the dry bulk and tanker shipping sectors.

AP Moller-Maersk’s value eroded by 2% in August and 15% for the three months between June and August, 2015.

The flag-ship company – Maersk Line – is going through its biggest turmoil and may see suspension of two-to-four larger strings in Q4, 2015 to lift vessel utilisation.

Total volumes, especially on the Asia – Europe route, may also take a hit this year due to de-stocking in Europe, sanctions against Russia and a strengthening yuan against the euro.

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