Filings have revealed a string of primary insiders buying up stock in Oslo-listed MPC Container Ships (MPCC) as freight rates plunge and the share closed in on a 12-month low.
Major German backer MPC Group’s Ferrostaal unit this week bought 458,000 shares at NOK 20.40 ($1.98) each.
Ferrostaal also acquired 1.7m shares in MPCC during the summer, bringing total shareholdings to 2.2m shares.
This is on top of MPC Group’s 70.3m shares, or 15.8% of MPCC held through CSI — its designated investment vehicle.
In addition, MPCC chairman Ulf Hollander has bought 53,000 shares at NOK 19 each and board member Axel Schroeder acquired 41,000 shares at NOK 19.20 apiece.
Chief executive Constantin Baack has also bought 66,000 shares at about NOK 19 this week.
These primary insiders will get back about 10% imminently as a 19 cents dividend has been declared but not yet paid, according to Fearnley Securities.
Of this, 14 cents are classed as “recurring” based on a set ratio of earnings.
The company’s existing charter backlog, assuming no re-chartering of the four vessels coming open later this year, will yield another 32 cents of dividends in 2022, the investment bank said.
“In the charter market, some classic panamax tonnage has been fixed at $40,000 to $50,000 for six-month periods, which is around a 50% drop in rates compared to a couple of weeks ago,” Fearnleys analysts Oystein Vaagen, Erik Gabriel Hovi and Ulrik Mannhart said.
Feeder ships of 1,700 teu now find new work for 12-month periods at $35,000 per day, down from $50,000 in early August.
Despite the drop in rates, they remain at historically high levels and well above break-even levels.
“However, the drop is coming at higher-than-expected speeds,” the analysts said.
They believe the impact is heavily skewed towards carriers with high spot exposure.
“Whilst cargo rates started dropping some time ago, charter rates have remained more resilient, which has been supported by the short supply of tonnage and ongoing congestion globally,” the analysts said.
But vessel supply will rise as cargo volumes decline, and port congestion is easing.
According to consultancy Alphaliner, the current drop in rates is probably more than a simple market correction and likely to worsen, at least in the short term.