Shares of Japanese shipping companies rise on expectations of higher profits
Shares of Mitsui OSK Lines Ltd and Kawasaki Kisen Kaisha Ltd, Japan's second and third-largest shipping companies, rose on expectations that they will beat their revised earnings forecasts.
Smooth sailing: Shares of Kawasaki Kisen Kaisha Ltd, Japan's third-largest shipping company, rose 4.3 per cent to close at 1,668 yen yesterday as it predicts a 38 per cent increase in net income to 71 billion yen
Mitsui OSK shares surged 4.4per cent to 1,860 yen at the close of trading in Tokyo. Kawasaki Kisen shares rose 4.3 per cent to 1,668 yen.
Shares of Nippon Yusen KK, the nation's largest shipping company by sales, rose 1.3 per cent to 1,216yen.
All three shipping lines raised their full-year profit forecasts last week after reporting higher first-quarter earnings.
Rates for shipping dry-bulk cargos have doubled during the past year because of China's demand for iron ore and congestion at Australia's Newcastle port, the world's biggest for coal exports.
'Mitsui OSK and Kawasaki Kisen still have leeway for higher earnings even after revising up their profit forecasts,' said Yoshihisa Miyamoto, an analyst at Okasan Securities Co here. 'There is absolutely no reason to sell their shares.'
Mitsui OSK shares may climb as high as 2,300 yen in coming months, Mr Miyamoto said.
Mitsui OSK forecast net income will rise 20 per cent to a record 145billion yen (S$1.8 billion) in the year ending March 31. Kawasaki Kisen predicted a 38per cent increase to 71 billion yen.
The Baltic Dry Index, a benchmark for the price of shipping bulk commodities such as iron ore, coal and steel, rose to a record 6,890 on July 27, according to the Baltic Exchange in London.
Smooth sailing: Shares of Kawasaki Kisen Kaisha Ltd, Japan's third-largest shipping company, rose 4.3 per cent to close at 1,668 yen yesterday as it predicts a 38 per cent increase in net income to 71 billion yen
Mitsui OSK shares surged 4.4per cent to 1,860 yen at the close of trading in Tokyo. Kawasaki Kisen shares rose 4.3 per cent to 1,668 yen.
Shares of Nippon Yusen KK, the nation's largest shipping company by sales, rose 1.3 per cent to 1,216yen.
All three shipping lines raised their full-year profit forecasts last week after reporting higher first-quarter earnings.
Rates for shipping dry-bulk cargos have doubled during the past year because of China's demand for iron ore and congestion at Australia's Newcastle port, the world's biggest for coal exports.
'Mitsui OSK and Kawasaki Kisen still have leeway for higher earnings even after revising up their profit forecasts,' said Yoshihisa Miyamoto, an analyst at Okasan Securities Co here. 'There is absolutely no reason to sell their shares.'
Mitsui OSK shares may climb as high as 2,300 yen in coming months, Mr Miyamoto said.
Mitsui OSK forecast net income will rise 20 per cent to a record 145billion yen (S$1.8 billion) in the year ending March 31. Kawasaki Kisen predicted a 38per cent increase to 71 billion yen.
The Baltic Dry Index, a benchmark for the price of shipping bulk commodities such as iron ore, coal and steel, rose to a record 6,890 on July 27, according to the Baltic Exchange in London.