Although newbuildings ordering has slowed and demolition activity remains high, the existing oversupply in the dry bulk market continues. The operating environment for POSH remains challenging. The lack of capital expenditure by oil majors will continue to exert downward pressure on vessel utilization and charter rates. With the depressed market condition, POSH Group expects the carrying value of its goodwill and the carrying value of its fleet of vessels will be impaired. While the impairment amount is to be finally determined by year end, it is expected that these impairments will have a material adverse impact on POSH Group’s financial results for 4th quarter 2016 and FY2016. This will have an adverse impact on MBC Group’s results. MBC Group is expected to report a loss for FY2016.
based on busy weekly, there is long way to go for the industries to recover from the loss. confirm whole financial year 2016 is loss incurred. shipping supply is still over and need time to eliminate some weaker one. Unless the investment horizon longer, otherwise the money will be stuck quite a period first.
Malaysian Bulk Carriers Bhd (Maybulk) (Buy rating with TP of RM1.04)
The Baltic Dry Index (BDI), which measures charter rates across dry bulk ship sizes and routes, has recently surpassed the 1,200 level after averaging at 500 for the majority of 1HFY16.
The recent surge in the BDI can be attributed to a recent increase in coal and iron ore imports from China due to lower domestic production of these materials and a pick-up in demand for construction and power generation.
In addition, the prospects of the US embarking on infrastructure spending as part of its stimulus measures have also propped up sentiment on the industry.
The firm's 'buy' call on Maybulk with target price of RM1.04 is based on five-year average price-to-book ratio of 0.88x.
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
madcow
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Posted by madcow > 2016-10-26 09:21 | Report Abuse
BDI is on downtrend > http://www.economiccalendar.com/2016/10/24/baltic-dry-indexs-plunge-sparks-concern-record-lows-could/