By Clarence Leong
Shares of shipping companies dropped Thursday morning in Hong Kong amid signs of declining freight rates and investor concerns about waning global demand.
Cosco Shipping Holdings Co. was down 8.0% at HK$13.18 by midday, taking year-to-date losses to 13%. Orient Overseas (International) Ltd. lost 9.2% and Pacific Basin Shipping Ltd. fell 5.8%.
“The shipping freight rate is trending down, so the market sentiment is not well,” said Kevin Zhuo, an analyst at brokerage Guotai Junan International.
Investors are downbeat about the prospect of extended weakness in freight rates and watching to see if demand in the U.S. weakens over the coming months, he added.
The Baltic Dry Index, which measures the cost to move major bulk commodities by sea, fell 4.1% overnight to 2410, the lowest level in more than a month, according to FactSet.
Uncertainty about shipping companies’ profits, especially beyond 2022, is also weighing on sentiment.
“It’s that uncertainty that’s now being reflected in the share price, combined with the very bad outlook,” Mr. Zhuo said.
Hong Kong’s benchmark Hang Seng Index was down 0.2% at midday.
Write to Clarence Leong at [email protected]
(END) Dow Jones Newswires
06-09-22 0027ET
