Maybank Kim Eng has resumed coverage of Singapore's container shipping firm Neptune Orient Lines (NOL) with a hold rating and a target price of S$1.10, Reuters reports. NOL's quarterly losses, due to falling freight rates and higher bunker fuel prices, could widen further in the off-peak season in the fourth quarter, Maybank Kim Eng said.
It also added that softening demand in the industry and a glut of new vessels in the pipeline is set to challenge the shipping industry well into the first half of 2012.
"Though current stock valuation is inexpensive, we think investors should ideally wait for more positive signs of moderating freight rate decline before taking the plunge," the brokerage said in a report.
At 0126 GMT, shares of NOL were 1.8 percent lower at S$1.10. The shares have fallen about 50 percent since the start of the year.
It also added that softening demand in the industry and a glut of new vessels in the pipeline is set to challenge the shipping industry well into the first half of 2012.
"Though current stock valuation is inexpensive, we think investors should ideally wait for more positive signs of moderating freight rate decline before taking the plunge," the brokerage said in a report.
At 0126 GMT, shares of NOL were 1.8 percent lower at S$1.10. The shares have fallen about 50 percent since the start of the year.