The Oslo Bors Shipping Index has fallen almost 20% since a peak at the beginning of October.
But Norwegian retail investors keep buying shipping stocks.
Mads Johannesen, investment economist at the Nordic online broker Nordnet, told TradeWinds: “Even though the shipping index is down on weaker rates and worse quarterly results than expected, interest among customers is still high. In total, there were net purchases of shipping shares throughout November.”
In November, the most bought shipping stocks among Nordnet’s clients were Hoegh Autoliners, Frontline, Belships and Wilh Wilhelmsen.
“Even though Frontline fell over 10% after its quarterly presentation, we see that retail investors took the opportunity to buy more shares,” Johannesen said.
Fearnley Securities maintained a “buy” recommendation for Frontline and said the stock is “cheapest it has been in years” after the plunge.
Johannesen added: “Frontline also told the market that rates and the near-term future do not look as bright as the market had priced in.
“The much-talked-about ‘winter market’ seems to be lingering and the market is currently wondering if it will come at all.”
The most sold shipping stocks in November were MPC Container Ships, Golden Ocean and Wallenius Wilhelmsen.
“I don’t see a particular pattern towards different segments, but rather towards individual stocks. A company like MPC Container Ships, which was previously a favourite among retail investors, has been sold off sharply throughout the month. The stock is still up over 60% so far this year, but in the latter part of November the stock has fallen over 18%, based on a somewhat weaker outlook for the sector,” Johannesen said.
MPC Container Ships saw its profit shaved in the third quarter by lower freight rates.
Net earnings were $63.7m, versus $68.2m in the same period of 2023.
Johannesen said: “The common denominator of the figures that I have analysed is that many of the customers have bought into companies that have fallen a lot. Even though the market is not very good, there is still good earnings and dividend potential in almost all segments.”
“There is also no dangerously large increase in the number of newbuildings coming to the market until 2027 at the earliest, so the fleet balance is still favourable and is thus sensitive to increasing demand.
“If the market continues to be tight and you suddenly experience increased demand, rates can quickly rise, especially within tanker and dry cargo,” he added.(Copyright)
