Tung's stock rising as family firm rides container shipping wave to record high Chief Executive Tung Chee-hwa may be weathering his last great political storm, but it remains clear sailing for his family shipping firm. Shares in Orient Overseas (International) Ltd (OOIL) have continued to outperform the market, closing yesterday at a record $34.90. They have risen 4.2 per cent since reports began circulating on Tuesday that Mr Tung may step down, helped by a booming container shipping sector and analyst reports that its strong run may now extend to 2007. The Hang Seng Index, meanwhile, has fallen 2.2 per cent. According to Macquarie shipping analyst Peter Williamson, the present industry cycle is more robust than its predecessors, with a potential 40 per cent upside for the share prices of some of Asia's leading shipping companies. 'The demand side of industry forecasts beyond 12 months has been consistently underestimated in the past,' Mr Williamson said in his most recent report. 'We believe upside risk to 2006 forecasts is high.' Mr Williamson rated OOIL alongside South Korea's Hanjin Shipping and Taiwan's Yangming Marine as one of his top picks, with a target price of $39.50. Bearish predictions that the container shipping sector may have peaked mostly point to the huge volume of vessels on order at the world's shipyards, an injection of supply which critics say threatens to outstrip demand and send freight rates tumbling as early as next year. But Mr Williamson dismissed those fears in his report. 'Capacity constraints at key [west coast] ports in the US are causing a shift to alternative ports on the US east coast, Canada and Mexico,' he said. 'This shift absorbs capacity due to congestion and the additional [miles per unit carried] required to reach more distant ports. The supply side of the equation could be reduced by up to 3 per cent during the 2006 peak season, pushing the industry into positive balance.' Whatever his political future holds, Mr Tung can at least look forward to comfortable retirement. He owns 15.6 per cent of OOIL, or 80.85 million shares. The company was trading at below $5 a share just weeks before he took office in July 1997.