Sept. 5 (Bloomberg) -- Pacific Basin Shipping Ltd., Hong Kong’s biggest dry-bulk carrier, led a rally of shipping stocks in the city today as it surged the most in more than four years on higher freight rates.
The stock jumped 9.5 percent, the biggest gain since July 15, 2009, to close at HK$5.17 in Hong Kong trading today. The city’s benchmark Hang Seng Index increased 1.2 percent.
The Baltic Dry Index, the benchmark freight rate for hauling commodities, jumped 4 percent to 1,215, the highest in 21 months in London yesterday on higher demand for iron ore and grains. Carriers and ship owners also slowed speeding and scrapped more vessels to reduce excess capacity to shore up rates, according to a Macquarie Group Ltd. note by analysts led by Bonnie Chan yesterday.
“We believe Pacific Basin is a long-term winner in the sector as it takes advantage of the current slump in asset prices to acquire vessels and enhance its long-term profitability,” Chan said in the note, rating the stock “outperform” with a target price of HK$6.00
China Shipping Development Co Ltd., the commodity-carrying arm of the nation’s No.2 shipping group, advanced 6.7 percent to close at HK$4.33 in Hong Kong trading today.
China Cosco Holdings Co., the nation’s biggest shipping firm that moves containers and commodities, jumped 7 percent to close at HK$3.86.
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