Golden Ocean climbed as much as 5.9 percent, the most since Nov. 24. The stock was up 4.9 percent at 5.08 kroner by 2:08 p.m. local time, leading gains in Norway’s benchmark OBX Index and giving the company a market value of 2.32 billion kroner ($430 million). Platou also recommended purchasing stock in Navios Maritime Holdings Inc. (NM) and DryShips Inc. (DRYS)
Golden Ocean probably will gain after arranging “long- term” rentals for its fleet, shielding earnings as costs slide for individual charters, Platou analyst Frode Morkedal said in an e-mailed report today. The investment bank gave the Hamilton, Bermuda-based company’s shares a “neutral” recommendation until now, along with Navios and DryShips.
Eighty-one percent of Golden Ocean’s ships are leased out on longer-duration contracts for this year, falling to 70 percent in 2012, Morkedal said. Navios’ equivalent respective rates are 91 percent and 58 percent. Stock in DryShips, down 14 percent in May, has dropped too far, the analyst said.
Platou cut its estimate for this year’s average daily cost of hiring a capesize commodity-hauling ship to $12,000 from $16,000 after fewer cargo shipments from Australia and Brazil curbed demand, according to the report. That compares with an average of $8,269 so far in 2011.
A record number of new vessels left shipyards to enter service this year, while demand growth has been “weaker than expected,” Morkedal said. The global fleet of dry-bulk commodity carriers swelled by 15 percent from a year earlier in 2011’s first four months, led by capesizes, he said.
Less coal and iron ore was shipped from Australia and Brazil over lengthy distances in the four-month period, according to the report. While fleet growth will exceed demand gains, capesize rents may rise if exports from the countries normalize, Morkedal said. Hire rates for the ships have slid 55 percent this year after a 46 percent plunge in 2010.
Australia is the world’s biggest exporter of coal and iron ore. Vale SA, the largest iron-ore producer, is based in Rio de Janeiro.
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