SHIPPING BULLISH WORLDWIDE

If you’ve not heard it, the Dry Baltic Index (an index which measures dry bulk shipping rates for bulk carriers carrying commodities such as coal, iron ore, and grain) has been rising and setting records lately. China vociferous demand for commodities such as coal and iron have created congestion in ports in from South Africa to Australia. This has caused stocks of Drybulk shippers to go ballistic – look at the charts of Dryships (DRYS), Excel Maritime (EXM), and Diana Shipping (DSX)

On the local scene, Maybulk and Hubline could benefit from higher charter rates. I particularly like Maybulk, since it’s part of the Kuok group known for creating value (ok, so they screwed up on Transmile…..) and it’s part of a transportation empire (yes, including Transmile too). It also packs a generous dividend yield (too bad we can’t sell Call Options for monthly dividends on the KLSE). And compared to the 3 “enfant terribles” that I described listed in the USA, Maybulk has yet to make its run for crowning glory (it’s business is 70% in Drybulk). The new aluminum smelter to built through a JV with Rio Tinto in Sarawak should give a first mover advantage to Hubline.

I also like Alam Maritime, since it’s tied to the Oil&Gas sector and has a pending bonus issue (3-for-8).

Chief Shook