0857 GMT [Dow Jones] STOCK CALL: Asia-Europe container-shipping rates have touched cash breakeven levels and carriers may report 4Q12 losses on the route, CIMB says, adding unless they announce two to three more service cancellations, “carriers can wave goodbye to any chance of securing their Nov. 1 rate hike.” It views China’s order for 50 VLCCs as alarming as it will exacerbate oversupply and it is dismayed by India’s Goa banning iron-ore mining. “The shipping market does not need more bad news,” it says. “The outlook for the shipping sector in 2013 will likely remain tough, as oversupply continues to grow albeit at a slower pace than in 2012. Unless global demand growth miraculously accelerates, we recommend investors to look only at the strongest of names.” It rates the sector Neutral, viewing valuations as reflecting the tough conditions. It rates NOL (N03.SG) at Neutral with S$1.30 target, noting its heavy U.S. trade exposure will help it benefit from strong trans-Pacific volumes.
The stock is flat at S$1.135.
[I]-Leslie Shaffer, Dow Jones & Co[/I]