Stable outlook amid stronger fundamentals for shipping sector, says MIDF Research

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KUALA LUMPUR (Sept 10): MIDF Research has maintained its "neutral" rating on the shipping sector, saying it expects the recovery in Baltic Dry Index (BDI) rates to be more sustainable towards end of FY14, driven by the seasonality factor and possibly higher 2H14 iron ore shipments by Vale.

In a note Wednesday, the research house said the the Baltic Dirty Tanker Index rates eased towards end-August, albeit well above levels seen in 2Q14.

“We expect the tanker rate to improve again during the winter period. We maintain our Neutral stance on MISC with unchanged target price of RM6.53. Reiterate our Buy stance on Maybulk with unchanged target price of RM2.02,” it said.