Dry bulk shares have beaten the shipping pack so far in 2023, despite a recent drop in capesize rates.
Clarksons Securities said the last week was “another excellent” one for shipping stocks, with the average price up 2%.
By contrast, the S&P 500 index ended slightly in the red for the period, despite a little uptick towards the end of the week.
Bulker owners have seen their equities rise by an average of 8%, however.
US-listed Star Bulk Carriers has put on 10.27% in a month, while Genco Shipping & Trading has risen more than 12%.
John Fredriksen’s Golden Ocean Group has increased by 2.28% over the past month in Oslo.
“The confidence for dry bulk comes despite a 40% drop in capesize spot rates last week, which fell to $6,500 per day,” said analysts led by Frode Morkedal.
Heavy rain has impeded iron ore shipments from Brazil, resulting in a considerable decline in exports compared with last year, when significant rain fell in February, they added.
Activity is expected to stay light until the end of the month because China is closed for the Lunar New Year holiday.
“The market, in our opinion, is correctly focusing on the bigger picture, with China claiming that the worst of the Covid-19 battle is over, supported by China’s pro-growth policies, including those in the property sector, which could support a gradual improvement in the second half of the year,” Morkedal and his team said.
Norden covered, Ardmore target price raised
Clarksons Securities began coverage of Copenhagen-listed bulker owner and operator Norden last week.
“We are strong believers in the dry bulk sector, and we consider Norden as a great market play because of its operational leverage and attractive valuation,” the analysts added.
The investment bank is also revising its forecast and share price target for Ireland-based product tanker owner Ardmore Shipping.
It expects 2023 earnings per share to be $3.67, compared with a consensus of $1.84.
This is based on average MR spot rates of $34,000 per day.
The target share price has been increased to $19, against $13.84 in the US on Friday.
“We expect spot rates to rise in the coming months following the Chinese reopening, a low orderbook and the imposition of the EU embargo on Russian fuels in February,” the analysts said.