Dry Bulk Shipping Stocks Jump as BDI Rises for Five Consecutive Days

Shipping stocks rallied on Friday, as the Baltic Dry Index (BDI) continued its upward run for the fifth day, closing at 3,115 points on Thursday.

As of 15.50 hrs. local time in Thailand, the share price of Regional Container Lines Public Company Limited (RCL) rose THB3.00/share or 7.19% to THB44.75/share, with a trading value of THB1,018 million.

The share price of Thoresen Thai Agencies Public Company Limited (TTA) rose THB0.25/share or 2.63% to THB9.75/share, with a trading value of THB249 million.

The share price of Prima Marine Public Company Limited (PRM) rose THB0.10/share or 1.68% to THB6.05/share, with a trading value of THB43 million.

The share price of Precious Shipping Public Company Limited (PSL) rose THB0.10/share or 0.62% to THB16.20/share, with a trading value of THB276 million.

The Baltic Dry Index (BDI) climbed by 68 points to 3,115 points on Thursday (December 2). 

KTBST Securities (KTBST) maintains an Overweight weighting on the shipping sector and has a “BUY” recommendation on TTA (target price of THB15.00) and PSL (THB20.00) on expectations that freight rate will remain high in 2022. The market demand and supply, however, could influence the forward curve directions, while the global economy is widely forecast to rebound strongly in the aftermath of the COVID-19 pandemic and the supply for dry bulk shipping will likely remain tight given the 10-year low order book at 6-7%.

Although dry bulk shipping stocks are likely to remain under pressure due to the seasonal decline in freight rates, the emergence of the COVID-19 omicron variant has slowed logistics, resulting in a higher BDI.