• Investment World
• eWorld
• Catalyst
• Mentor
• Life
• Canvas
• Praxis
• Urban Pulse
• Brand Quest

Stocks

• Quotes
• SE Diary
• Scoreboard
• Open-End Mutual Fund

Shipping

• Ports
  
  

Archives

• Yesterday
• Datewise
• Resources

Group Sites

• The Hindu
• Business Line
• The Sportstar
• Frontline
• The Hindu eBooks
• The Hindu Images

Amit Mitra

Mumbai , Nov 28

ONSET of winter usually heats up stock prices of shipping companies, as the global freight market touches its peak for the year. And this year seems to be no exception.

Share prices of major Indian shipping companies have sailed on an upward curve during the last 30 days, although the increase was marginal in some of the companies.

Apart from the general upbeat sentiment in the equity market, the upturn in the tanker freight rates, have shored up the stocks of the shipping companies on the bourses, analysts say.

The stock price of Great Eastern Shipping, India's largest shipping company in the private sector, has seen the maximum increase — from a closing price of Rs 195 on October 28, it crawled up to Rs 231.30 on November 28.

Part of the interest that this counter attracted is due to the on-going process of de-merger of the company's offshore business into a separate entity, Great Offshore Ltd.

Similarly, the Shipping Corporation of India's stock inched up from Rs 151.45 to Rs 160.70 during this period, while that of Mercator Lines rose from Rs 103.25 to Rs 125.30.

The share prices of Varun Shipping and Essar Shipping also marginally rose from Rs 59.95 to Rs 68.75 and Rs 26.50 to Rs 29.45 respectively.

Firming up freight rates: The share prices of shipping companies and the prevailing freight market trend are known to share a common thread, as is evident from the fact that the freight rates displayed similar trends during the last one month.

The tanker rates have registered the most distinct increases, as winter months generally create additional demand for movement of oil as oil stocks are built up for heating requirements.

Take the case of very large crude carriers (VLCCs) — from an average rate of $19,201 a day in June this year, it increased to an average of $22,239 a day in August, $32,936 in September and $51,202 in October.

November saw the VLCC rates firm up further from $66,792 on November 1 to $1,00,270 on November 23.

Similarly, in the Suezmax segment, the rates moved up from an average of $26,526 a day in September to $49,107 in October and climbed further from $58,402 on November 1 to $76,592 on November 23.

Of course, the prevailing November rates are still a far cry from the November 2004 rates, which had touched unprecedented highs in maritime history.

For example, the VLCC rate on November 23 last year was $1,62,402, as against $1,00,270 this year.

Says Mr. John A Welham, Chairman of SSY, the London-based ship broking house: "We expect the rates to climb further in the coming weeks, but these will still be far lower than what they were last winter."

Shipping analysts agree that the global tanker rates will continue their upward climb, while the precise graph will depend on the extent of cold conditions that prevail as the winter progresses.

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

More Stories on : Shipping | Stock Markets

Stories in this Section
Finishing schools vital to make engg grads industry-ready

Copyright © 2005, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line