NOL up after loop plan cancelled
Shares of Neptune Orient Lines rose to a two-week high after a plan to add an Asia-Europe service loop was cancelled, a move that analysts said signals shipping lines' discipline not to add more capacity, Reuters reports.
NOL shares gained as much as 4.4 percent to S$1.305, the highest since April 17. But the shares are still down around 8 percent since the world's seventh-biggest container shipping firm reported a fourth-quarter net loss in late February.
On Wednesday, NOL said a group of six liners, of which its container shipping firm APL is a member, decided that market conditions have not improved and could not justify additional service between Asia and Europe.
"It's positive in the sense that they are not adding more capacity in the market right now. This will help to sustain rates in the Asia-Europe lane, as long as the other competitors don't add more loops," said a local analyst.
"It shows that the liners are intent on maintaining capacity discipline."
The G6 Alliance members include Hapag-Lloyd, Hyundai Merchant Marine, Mitsui O.S.K. Lines , Nippon Yusen Kaisha and Orient Overseas (International) Ltd's shipping unit Orient Overseas Container Line.