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Friday, October 30, 2015
Freight Investor Services LEADING THE
WAY IN FREIGHT AND COMMODITY DERIVATIVES
Commentary Oct 30th, 2015
Hapag-Lloyd fails to float on time.
Asia to North West Europe jumped a whopping $757 to $988 per TEU on the
back of the November 1st GRI, representing the highest level
on the route for 13 weeks. With capacity adjustments seemingly
supporting the latest increase, including the idling of a Maersk
Triple-E vessel, the extent of the customary post-GRI declines is a
little uncertain at this stage.
Despite the latest increase, rates still remain 25% lower than the same
period of 2014. In fact, weekly rates on the route haven’t been above
their corresponding period of 2014 at any point this year, reflecting
the fundamentally poor market conditions.
Elsewhere this week saw the news that Hapag-Lloyd has both delayed and
lowered its IPO offer price due to what it calls continued market
volatility. Previously the German line had announced plans to offer
shares in the region of EUR 23-29 per share, however this has
subsequently been lowered to EUR 20-22. This is on top of lowering its
proceeds target by 40% to USD 300m, having previously planned to raise
USD 500m when the IPO was first confirmed in September.
The downgrade may well be a reflection of nervousness from investors
following the announcement from Maersk Line downgrading its full year
underlying forecasts by some 30%. It looks like the timing of the
announcement from the Danish carrier has been somewhat unfortunate for
Trading of the Hapag-Lloyd shares on the Frankfurt Stock Exchange is
now expected to commence on November 6th, pushed back from
the initial float date of October 30th.
Last week also saw the announcement from the Baltic Exchange that it
will launch its very own container freight index, based on transacted
rates executed on Ningbo’s e-trading platform. The index will cover
rates ex-Ningbo to both European and Middle Eastern destinations and
will be published weekly every Friday at 4:00pm Beijing time.
US container trades also saw an increase this week, although not of the
same magnitude as in the European trades. Rates to the USWC
jumped $197 to $1,363 per FEU, although still remain 31% lower than the
same period last year.