KUALA LUMPUR (May 6):Shares in Malaysian Bulk Carriers Bhd (Maybulk) rose to a three-year high in active trade, tracking rising dry bulk freight rates currently at their 11-year high.

Maybulk shares rose as much as 11 sen or 15.17% to 83.5 sen today, with trading volume surging to a record 135.7 million — almost 14 times its two-month average of 9.78 million shares.

On market close, the stock pared a little of its gains to close at 82 sen, still up 9.5 sen or 13.1%, valuing the dry bulk carrier at RM820 million. The counter has gained over 50% since the start of the year.

Maybulk, a stock that has gone off investors’ radar since the collapse of the Baltic Exchange Dry Index in 2008, is back in the spotlight thanks to a climb in the index.  

The Baltic Dry Index soared to an 11-year high of 3,266 points yesterday, with continuous gains seen for 15 straight sessions since April 13. The index, which tracks freight rates across different vessel sizes, has more than doubled this year.

Higher freight rates augur well for Maybulk as it could charter out vessels for more. Maybulk operates 10 vessels with an aggregate carrying capacity of 555,059 metric ton deadweight spanning Europe and Australasia. The bulk carrier said that its vessels are “largely tramped on the spot and period markets”. 

The sharp rise in freight rates is mainly due to an undersupply, coupled with higher-than-expected demand amid a rebound in economic activities since late last year — although it remains to be seen if the momentum can be continued amid yet another spike in Covid-19 cases globally, including in key markets such as India.