Cosco Shipping Holdings' share price closed at its highest level in 13 years on Thursday as stock investors turned bullish on Asian firms involved in container and dry bulk shipping.
State giant China Cosco Shipping’s box arm saw its Shanghai-listed stocks surge by 10% to CNY 25.03 ($3.92), a level last seen in mid-2008.
Chinese brokerage CSC Financial raised Cosco Holdings’ target price to CNY 38, saying its share price is supported by buoyant container shipping rates.
“Freight rates have continued to hit fresh highs…It’s possible that rates will continue to set records or stay high for some time as the supply chain is extremely tight,” CSC Financial said in a note.
A fresh outbreak of Covid-19 in southern China has placed upward pressure on box rates as shipping demand remains strong.
Liner operators have reported severe congestion in Shenzhen, the world’s third-busiest container port, due to coronavirus-related work restrictions.
Vessel delays of more than 15 days are expected at the Yantian terminal alone.
“Rates remain about 3.5 [times of] 2020 levels and will likely continue to find support from tight market conditions, recovering economies, US stimulus measures, limited available containers and port congestion,” Bloomberg Intelligence said in a note.
With the bullish outlook of box shipping, listed container lines in Asia have seen their shares trading at or close to multi-year highs recently.
HMM's stock price closed at KRW 43,900 ($39.40) on the Korea Exchange on Thursday, not far from a six-year high of KRW 50,600 in late May.
Shares of Regional Container Lines in Thailand, Orient Overseas (International) Ltd in Hong Kong, and Evergreen Marine, Yang Ming Marine Transport and Wan Hai Lines in Taiwan are all trading near their all-time highs.
Separately, investors have been upbeat over dry bulk stocks as earnings prospects brighten during this year’s commodities boom.
Bangkok-listed Thoresen Thai Agencies rose 6.78% to THB 18.9 ($0.61) on Thursday, the highest since 2014. Hong Kong-listed Pacific Basin Shipping closed at HKD 3.07 ($0.40), just slightly below a seven-year high of HKD 3.16 reached on 10 June.
In Japan, share prices of the three shipping majors are also nearing their multi-year highs.
NYK Line’s shares closed at ¥5,110 ($46.70) on Thursday, about the highest since 2008. Mitsui OSK Lines traded at ¥4,845 ($44.30), close to a 10-year high. K Line’s share price was ¥3,350 ($33.60), after reaching a six-year high of ¥3,435 on 8 June.
Each of the Tokyo-listed companies has a big bulker fleet, and they together own the world’s sixth-largest container line in Ocean Network Express.
