Bank rescue, China data buoy shipping
Shares in a raft of shipping firms soared yesterday amid upbeat investor sentiment following the release of sharply higher mainland export and import figures for May and optimism about a bailout of Spanish banks.
But analysts cautioned that despite May's trade figures container shipping lines faced choppy waters from weakening freight rates that could dent revenues and profitability this year.
China Cosco Holdings, the dry bulk, container shipping and terminals operating subsidiary of the mainland's biggest shipping company, led the surge among shipping stocks, climbing more than 11.3 per cent to close at HK$3.84.
Rival box line China Shipping Container Lines, the mainland's second-largest box carrier, saw its share price rise by 10.9 per cent to HK$1.93 by yesterday's close.
Shares in China Shipping Development, the dry bulk cargo and tanker offshoot of the China Shipping Group, climbed 8.64 per cent to end the day at HK$4.16. Orient Overseas (International), the listed parent of the Tung-family-controlled Orient Overseas Container Line, finished the day up 7.58 per cent at HK$40.50. The broader market gained 2.44 per cent, its biggest single-day gain since mid-January, with the Hang Seng Index closing at 18,953.63.
Jon Windham, Asian marine analyst with Barclays Capital in Hong Kong, said: 'The market was up on the Spain bailout news and the strong Chinese trade data.'
Winnie Guo, from CCB International, agreed that both the trade figures and bank rescue in Spain buoyed yesterday's rally in shipping stocks.
She added that recent rate increases by container shipping contributed to the upbeat sentiment. Cosco Container Lines, part of China Cosco Holdings, announced several rate increases and fuel surcharges last week on various trade lanes.
But Guo and other analysts said spot container freight rates on the key Asia-Europe trade lane had started to fall just as container lines were heading into the peak pre-Christmas summer and autumn shipping season.
Figures from the Shanghai Shipping Exchange showed container rates from Shanghai to Europe dropped to US$1,634 per 20-foot container by Friday, down from US$1,934 a month ago. By comparison, transpacific rates had edged up slightly from about US$2,400 per feu (40-foot equivalent unit) a month ago to US$2,658 on Friday.
Container lines operating on the transpacific trade were due to introduce a peak season surcharge of US$600 per feu from Sunday but only one carrier, Cosco Container Lines, announced the surcharge.