2009 may be the worst year for shippers: Enam
The largest supply of shipping tonnage--a measure of the size or cargo capacity of a carrier--in over 20 years expected in 2009 may extend last year's decline in freight rates to the next 11 months, said Enam Securities. The flooding of tonnage comes when demand for commodities are slowing due to a global decline in industrial activity. "Net fleet addition for bulk carriers and tankers is expected at 2x (times) & 1.5x resp. over last year," the brokerage said in its report on GE Shipping titled '2009-the worst year for shippers'.
"Order cancellations will play a key role in determining the supply conditions in 2009. Yet, freight rates for tankers & bulk carriers are expected to remain well below its peak in 2008." it said.
Accordingly, Enam has downgraded GE Shipping's earnings estimates for 2009-10 by 41% and has a 12-month price target of Rs190. At 11:30 AM, GE Shipping shares were down 2.2% at Rs174.35
"Order cancellations will play a key role in determining the supply conditions in 2009. Yet, freight rates for tankers & bulk carriers are expected to remain well below its peak in 2008." it said.
Accordingly, Enam has downgraded GE Shipping's earnings estimates for 2009-10 by 41% and has a 12-month price target of Rs190. At 11:30 AM, GE Shipping shares were down 2.2% at Rs174.35