Gk Goh News

Shares of shipping group Neptune Orient Lines (NOL) hit a nine-month high today, boosted by prospects of its logistics operations and hopes its weightage will rise in changes to the MSCI Singapore index. NOL, which is the world's sixth largest container shipper, is up 12.5 percent since the start of the year and has outperformed the benchmark Straits Times Index by 31 percent. "A lot of houses like this stock because it has been a great turnaround story. There is also speculation that it might be a beneficiary in the upcoming MSCI changes," a dealer with a Singapore brokerage said. The Singapore-based company, in which the government holds 33 percent, is a constituent stock of the MSCI index with a 1.18 percent weighting.

Shares of Neptune Orient Lines Ltd (NOL), the world's sixth largest container shipper, sank as much as 2.5 percent on Thursday morning to their lowest level since March 2000 on freight rate concerns. By the midday break, NOL had crawled back to S$1.20, down one cent, from S$1.18 in moderate trade of 2.78 million shares. Analysts said there were increased worries for its earnings due to prolonged pressure in freight rates with no short-term recovery in sight for cargo demand due to slowing economies. "People are concerned over pressures in freight rates," said Albert Goh, an analyst at Kim Eng Securities. NOL scrapped a planned share flotation and U.S. listing of its oil transportation unit last month.

GK Goh Securities has downgraded Neptune Orient Lines (NOL), the world's sixth largest container shipper, to hold from buy due to the economic slowdown that is expected to hurt capacity levels and dent earnings. "The expected pick-up in summer shipping activity does not appear to be coming through," an analyst said in a recent report. "Capacity utilization is now under pressure, reversing a two-year trend of container trade growth outpacing capacity expansion." Although NOL remained undervalued compared with its peers, analysts said high utilization - a major factor driving its profits - was expected to come off as liners cut rates to fill ships. Earnings per share were projected at $.07 for fiscal year 2001 and $.05 for 2002, down 58 percent and 70 percent respectively.

COSCO Investment (Singapore) Ltd. posted a 66 percent jump in first-half net profit to S$9.25 million ($5.27 million) on greater margins from bulk shipping and its container feeder service operations. But turnover fell 10 percent to S$78 million due mainly to the scaling down of its trading activities. Singapore-listed COSCO, a unit of China's COSCO Group, said it expected its performance in the second half to be comparable to the first as all of its business units were expected to remain profitable except for property. G.K. Goh analyst Masya Spek told reporters after the company's news conference that COSCO's shipping business performed within expectations but general trading was stronger than anticipated. "I didn't expect them to do so much general trading.

Neptune Orient Lines Ltd (NOL), the world's sixth largest container shipping group, apologized to shareholders in a Singapore newspaper advertisement on Thursday for its recent one-day share suspension and price drop. "It is regrettable if the suspension has caused you concern and inconvenience," Flemming Jacobs, NOL Group president and CEO, said in a Business Times announcement. The Singapore Exchange suspended NOL shares last Friday after Jacobs said in an interview carried in local newspapers that the Singapore-based company's reults would be lower this year. "The expectations now are for much lower results than what we saw last year," he was quoted as saying.

Shares of shipping and logistics group Neptune Orient Lines Ltd. (NOL) surged almost 10 percent last Tuesday on optimism over recent management changes, dealers said. "We are buying on the back of increasing confidence in the market, higher assurance that the Fed will not be doing anything drastic and hope that NOL's new management would bring positive changes," said one dealer. In late September, NOL announced the hiring of more senior executives from Sea-Land Services as senior officials for its container transportation arm, APL, including Fleming Jacobs as the new chief executive officer. The moves were seen as positive and reinforced the shipping group's commitment to grow its European and North American presence.

Shipowners are now better placed to cope with soaring fuel prices because of growth in trade as Asia recovers from economic crisis, industry sources and analysts said. The price of bunker fuel, which typically makes up about five percent of a shipper's total operating costs, has - over the past six months - doubled to $140 per ton. The spoils from improved conditions have not been evenly shared within the industry, with tanker owners hit the worst. Three global-pacts among oil producers to cut output and shore up prices have had a negative impact on tanker owners who now face higher bunker costs and lower shipping volumes. The producers agreed to remove from world oil production about 5.1 million bpd of crude oil…