06-11-2022 US bulker stocks mount Friday surge amid China optimism, By Eric Priante Martin, TradeWinds
Bulker shares surged in New York on Friday as broader stock markets gained and investors took a liking to signs that China lockdown pains are poised to ease. The Breakwave Dry Bulk Shipping Exchange Traded Fund jumped 4.7% during the day to reach $7.72, according to data from Yahoo Finance. But the measure of bulker stock strength seesawed over a week in which it also touched its lowest level of the year, and its latest close was only a penny higher than the reading on the prior Friday. The ETF has lost 73.8% so far this year.
Friday saw at least five New York-listed bulker stocks post gains of more than 5%. Stifel analyst Benjamin Nolan tied the gains to some optimism over parts of China coming out of lockdown, where a zero-Covid-19 policy has hurt dry bulk markets. On Wednesday, Breakwave Advisors, the asset management firm that runs the dry bulk ETF, said on Twitter that relaxation of China’s zero-Covid policy was leading to positive sentiment in the iron ore sector. And the shares did spike, with the fund surging to nearly $8, before slumping again as stocks across New York markets were punished by news over interest rates.
But on Friday, Golden Ocean Shipping, the John Fredriksen-backed bulker owner, led the pack in the upward swing. Its US-listed shares added nearly 9.8% to close the session at $9.45. Right behind it was Greece’s Star Bulk Carriers, which saw its share price rocket 9.2% to $19.44. Eagle Bulk Shipping saw its shares jump 5.6% to $51.84, even after the Connecticut company reported lower-than-expected third-quarter earnings. “Eagle’s third quarter results came in at a $4.01 EPS [earnings per share], which was lower sequentially, but still reflective of a remarkably strong market,” Nolan wrote in a note to clients.
The stocks no doubt had some help from a spot market that took a modest rebound on Friday. The Baltic Dry Index, a cross-segment measure of bulker market strength, edged up 33 points to 1,323, ending a decline that had been unbroken since 18 October. But broader stock market gains also likely provided some lift, with the Dow Jones Industrial Average gaining 1.3%, although that was a 1.4% decline for the week.