KUALA LUMPUR (Dec 23): MIDF Research has maintained its Neutral rating on the shipping sector and said it expects the industry outlook to be mixed.

In a note Tuesday, MIDF Research said select rates within the tanker segment (i.e. Petroleum and LNG) are expected to improve although this would be largely offset by further deterioration in the dry bulk and chemicals segments.

“Notwithstanding, we are Neutral on MISC Bhd while we have a Buy call on Malaysian Bulk Carriers Bhd.

“Overall, we are cautious on the outlook of the dry bulk segment, remaining flat going into 1Q15 due to lower factory activity amidst the seasonally slow period in conjunction with the Chinese New Year festival.

“Furthermore, we believe the potential slowdown in China’s economy could see rates remaining depressed,” it said.

MIDF Research said that on the flipside, it expects the Baltic Dry Tanker Index to improve due to continued weakness in crude oil prices encouraging trade activities.

“Furthermore, a colder-than-expected winter season in the northern hemisphere, similar to end-2013 and early-2014 could boost rates.

“The possible lift in US’ sanction on the crude oil exports after almost four decades may provide an additional boost to the index,” it said.