KUALA LUMPUR (May 6): MISC Bhd fell as much as 24 sen or 3% among top decliners, amid a decline in Asian shipping rates.
Reuters reported steep drops in Asian shipping rates are adding to fears about slowing trade, as a fall in export orders from countries across the region depresses demand for ships carrying 90 percent of world trade.
Rates for container ships carrying finished goods are down 30 percent this year, close to record lows despite a recent rebound, and rates for bulk carriers used to transport goods such as iron ore and coal are also near historic lows.
MISC's (fundamental: 1.2; valuation: 0.8) shares declined to its lowest so far today at RM8.65. At 2:45pm, the stock pared losses at RM8.66 with with some two million shares traded. At RM8.66, MISC had a market capitalisation of RM38.62 billion.
Analysts said current shipping rates could be seen as an indicator of world trade. Reuters quoted HSBC co-head of Asian Economics Research Frederic Neumann as saying slower world trade was imminent, based on current economic trends.
"Everything is signaling a further slowdown in the global trade cycle. Nothing suggests a turnaround soon.
"We're not even seeing a big pick-up, following the U.S. West Coast strike closure earlier this year," said Neumann.
(Notes: The Edge Research's fundamental score reflects a company's profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)