Latest Search
Quote
| Back Zoom + Zoom - | ||||
|
<Research>HSBC Research: Resumption of Red Sea Route in Shipping to Lower Freight Rates from Previous Forecast; Underweight Kept for COSCO SHIP HOLD, OOIL
Recommend 20 Positive 14 Negative 17 |
||||
|
||||
|
Shipping company Maersk announced yesterday (15th) that it will resume the route from India and the Middle East to the US East Coast via the Red Sea and Suez Canal, HSBC Global Investment Research reported. CMA CGM already rerouted its India Subcontinent and Egypt to US routes via the Suez Canal. The Ocean Alliance also arranged for its Europe-Asia eastbound and Mediterranean to Asia eastbound schedules to reroute via the Suez Canal starting this month and next. The broker noted that the resumption of routes through these waters will increase capacity by 7-8%, lowering freight rates. The broker forecast that freight rates will decline 9-16% this year, assuming that the Red Sea shipping disruption continues until at least mid-year. The broker lately spotted downside risks to these forecasts. Their analysis showed that a 10% drop in freight rates compared to their forecast would reduce Maersk's EBIT margin by 3.5-5.4 ppts, resulting in losses for Maersk and its German peer Hapag-Lloyd. HSBC Global Investment Research maintained Underweight for COSCO SHIP HOLD (01919.HK), OOIL (00316.HK), Evergreen, and Hapag-Lloyd, while assigning a Hold rating to SITC (01308.HK) and a Buy rating to Maersk, based on the latter's logistics and terminal operations providing a cushion during the shipping industry's downcycle. The broker set target prices for COSCO SHIP HOLD, OOIL, and SITC at HKD11, HKD100, and HKD27, respectively. AASTOCKS Financial News Website: www.aastocks.com |
||||
Copied to Clipboard
 |
||||
