27-04-2021 Bulker stocks lead strong week for US-listed shares as Baltic index climbs, By Joe Brady, TradeWinds
An 11-year high in the Baltic Dry Index (BDI) had a quick impact on US-listed bulker stocks, helping shipping reverse two weeks of losses. Bulker shares under the coverage of US investment bank Jefferies soared an average of 17% last week, spearheading an average 4.2% rise for the 32 listed companies under its coverage.
The gain outpaced a loss of 0.1% for the S&P 500 and a rise of 0.4% in the small cap Russell 2000 index.
The BDI hit its highest levels since October 2010. “Capesize rates are about $35,000 a day while supramax rates are close to $23,000 a day, with the FFA curve pointing to further strength,” said Jefferies analyst Randy Giveans.
“As a result of the ongoing improvement in spot rates, time charter rates, and secondhand asset values, we are increasing our NAV estimates and price targets for all dry bulk companies under coverage.”
The week saw six of the top seven climbers be dry bulk operators. Genco Shipping & Trading, which announced a new high-dividend strategy, led the way with a 19.1% hike, but was followed closely by Safe Bulkers with the same number, Eagle Bulk Shipping at 18.9%, Diana Shipping at 18% and Navios Maritime Partners at 17.9%. Star Bulk Carriers also gained the top 10 with a 10.6% jump.
No other shipping operating sector came even close to matching dry bulk’s gains. LNG and LPG operators both gained an average 3%, with containerships edging up 2%. Tankers fell back 1% as most rates dropped.
Giveans is looking forward to the onset of earnings season as yet another catalyst in the coming weeks.