by Ernie B. Calucag
Shares of Neptune Orient Lines (NOL) rose to a two-week high Thursday after a plan to add an Asia-Europe service loop was cancelled, a move that analysts said signals shipping lines’ discipline not to add more capacity.
NOL shares gained as much as 4.4 per cent to reach intra-day high of S$1.305, the highest since April 17, before closing at S$1.275 each, a gain of 2 per cent from Wednesday’s S$1.25.
However, the shares have not yet recovered from its 52-week high of S$1.93 since the world’s seventh-biggest container shipping firm reported a worse-than-expected fourth-quarter net loss of US$320.0 million (S$369.2 million) in late February.
On Wednesday, NOL said a group of six liners, of which its container shipping firm APL is a member, decided that market conditions have not improved and could not justify additional service between Asia and Europe.
“Investors greeted this news positively as it means NOL won’t be increasing capacity while the global economic recovery looks vulnerable,” said Justin Harper of IG Markets Singapore.
The Straits Times Index, meanwhile, slipped 0.2 per cent to 3,000.94 at Thursday closing. About three shares fell for every two that rose on the 30-member gauge.