(KBHM) Good interview on Bloomberg last night. Quite rare to hear the lads at Bloomie talk about the shipping industry. Johnson Leung from Jeffries Bank, is defending the container industry. He points out that he likes the Japanese names as they currently have "distressed valuations", before the cycle turns. He sees a 20-40% upside in the industry. His reasoning is that "the industry lost so much money last year", which I'm not sure is enough of a story for me.
He has some good information about the bulk market, however. The figures are gradually rising in general. Capesize vessels are under a lot of pressure, due to fear of China's economic downturn; which would result in decreasing iron ore imports. Smaller sized vessels, on the other hand are looking good. He notes that Handysize freight rates have gained 30% the last month.
That may be the reason for his recommendation (or pitch, had he had the air-time) for Pacific Basin (2343:HK), who's owns 35 bulkers, all non-Capesize, and charters another 75. Their current new-build book consists of eight Handysize and six Handymax.
Pacific Basin (2343:HK) closed yesterday at HK$ 4.15, up 1.2%. They currently offer a 5.1% dividend yield. March 1st the company posted a 69% profit drop in 2011 due to lower rates and a write-off of vehicle-carrying ships.
"The time to buy is when there's blood in the streets"
- Baron Rothschild, 18th Century
