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Nordic American Tankers Limited Message Board

  • centralstationamsterd centralstationamsterd Aug 12, 2013 10:26 PM Flag

    Values Rebounding Most Since ’10

    Ship Values Rebounding Most Since ’10 as Norden Rallies: Freight
    By Rob Sheridan - Aug 12, 2013 4:01 PM PT

    The biggest advance since 2010 in the price of secondhand commodity carriers is boosting ship owners from Golden Ocean Group Ltd. to D/S Norden A/S on mounting confidence the industry’s worst-ever slump is ending.

    The value of five-year-old Capesizes, the largest iron-ore carriers, rose 5.7 percent to $31.4 million this year, while Panamaxes, the biggest to navigate the Panama Canal, climbed 16 percent to $21.2 million, according to the Baltic Exchange. Investors should buy Golden Ocean and Norden because the shares don’t fully reflect the gains, said Erik Nikolai Stavseth, an analyst at Arctic Securities ASA in Oslo whose recommendations on shipping companies returned 75 percent in three years.

    Rising secondhand values are a sign that some investors are getting more bullish on the outlook for shipping rates, which tumbled as much as 95 percent from their peak in 2008. The Baltic Dry Index, a measure of earnings across four vessel classes, rebounded 42 percent this year as fleet growth slowed and seaborne trade in everything from iron ore and coal to soybeans and fertilizers expanded to a record.

    “People are buying ships because they think we’re past the bottom,” said Stavseth, who predicts that shares of Golden Ocean will advance 7.1 percent in a year and Norden will gain 25 percent. “Rising ship prices tell us that the market is moving in the right direction and earnings are expected to increase.”

    Check out the full read on bloomberg

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