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| Illustrative Image .— Photo tinnhanhchungkhoan.vn |
HA NOI (Biz Hub) — Half of shipping stocks on the local unlisted market (UPCoM) were traded at very low prices as their firms suffered losses of hundreds of billions and no better future was seen this year.
Of the total 31 warning stocks which were only allowed to trade on Friday since May 26 after the UPCoM classified stocks into two sets last month, seven stocks belong to shipping firms. Of 104 stocks traded on the unlisted market, 15 stocks were in the maritime shipping category.
As of yesterday, stocks of Dong Do Marine Joint Stock Company (DDM) was at VND1,000(US$0.04) while stocks of International Shipping and Labour Cooperation JSC (ISG), Northern Shipping JSC(NOS), Seagull Shipping Company (SSG), South Viet Nam Container Shipping JSC (VSG), Viet Nam Sea Transport and Chartering Joint Stock Company (VST) were traded at between VND600 and VND2,000 each.
Trading at highest price among the group, stocks of Vinacomin - Waterway Transport JSC (WTC) were traded at VND3,600 ($0.16) each while stocks of Viet Hai Shipping & Real Properties Corporation (VSP) already cancelled trading in the market due to unsolvable financial trouble.
All seven firms had negative equity as of December 31, 2015.
Specifically, ISG recorded an accumulated loss of VND298.5 billion in 2015. NOS, up to Q1 this year, had accumulated losses of more than VND3 trillion, VST accumulated losses of VND816.8 billion and DDM accumulated losses of VND581.7 billion.
Shipping market woes
According to maritime experts, the difficulties in the shipping market caused heavy losses to most related firms.
Last year, the Baltic Dry Index (BDI) fell sharply, from 2,000 points at the beginning of 2015 to 471 points in December. It marked a seven-year low for the index (it was 12,000 points in 2008). The index continued its downward trend this year. On February 10, the index sank to 290 points.
Meanwhile, the Baltic Handysize Index (BHSI), a measure of the strength of smaller dry bulk vessel spot freight earnings (basis 28,000 dwt bulk carriers), the most popular for Viet Nam firms fell to 183 points on February 12, the lowest point in its history. The average BHSI in Q1 was estimated at 229 points, down 28.1 per cent compared to Q4 2015. Freight rate of firms in the Pacific region for a voyage from West Australia to China fell to around $3.2 each, the lowest rate since November 2001.
A leader of Viet Nam National Shipping Lines (Vinalines) said BDI fell mainly due to lower Chinese consumption and instability in many parts of the world. The index recovered to 700 points in late April, but since then it fell again and is around 600 points currently.
The Vinalines leader predicted that the shipping industry would likely fall until the end of the year, adding that the local supply was much bigger than demand, thus resulting in lower prices of transportation.
In addition to common difficulties of industry that made UPCoM's stocks suffer, Vietcombank Securities Company (VCBS) also found other reasons that made some local shipping fall in the cargo shipping market.
VCBS said Viet Nam reached 107.8 million tonnes in 2015, up 9.5 per cent over 2014. Of which local shipping firms only carried out 10-12 per cent due to strong competition from foreign rivals.
The securities company thought that the shortcomings of local shipping firms, such as poorly-organised fleet structure, lower connections between shipowners and customers, technical and management weakness were obstructing their success in the market.
In the mean time, VCBS also predicted a brighter future for the shipping industry in the medium and long term thanks to the joining of Viet Nam in trade agreements, which will bring more shipping demand from global manufacturers such as Samsung, Microsoft, LG and Bridgestone.
The Viet Nam Maritime Administration estimated 470 million tonnes of goods were shipped via ports, up 10 per cent over last year.
Thus, VCBS still suggests its customers buy shipping stocks from well-developed shippers such as Gemadept Corporation(GMD), Port of Hai Phong Joint Stock Company (PHP) and Doan Xa Port Joint Stock Company (DXP). — VNS