Maybank predicts container shipping recovery
NOL's routes from Asia to Europe and Asia to the U.S. could benefit from economic stimulus efforts, Ship & Bunker reports. In an expression of optimism about the container shipping industry, Maybank Kim Eng (Maybank) upgraded shares of Neptune Orient Lines [NOL] from "sell" to "buy," Reuters reports.
The Malaysian financial company predicted a demand-led recovery of the container shipping business with help from U.S. and European government interventions to support the global economy.
The bank cited the European Union's bond-buying program and the U.S.'s new round of quantitative easing as stimulants to global confidence and trade.
"While the current EU and US stimulus' direct benefits will take some time to materialise, what we see most important is the commitment to shoring up confidence in the respective regions' economies," the bank wrote, according to the Singapore Business Review.
Maybank added that troubled companies like NOL, which is heavily dependent on trading between Asia and the U.S. and between Asia and Europe, are likely to benefit from the governments' actions.
"While this news has not gotten the market immediately euphoric, we see these steps paving the way for emergence from the bottom for beta plays such as NOL, from a demand-led perspective," Maybank wrote.
APL, the container shipping division of NOL, made its first profit in two years in the second quarter of 2012.
