Company Name: NEPTUNE ORIENT LINES LIMITED
| Research House: DBS Vickers | Price Call: BUY | Target Price: 1.45 |
Singapore’s key index slipped slightly, in line with other Asian bourses on worries that stalled talks to avert a U.S. fiscal crisis could lead to a recession in the world's largest economy.
The benchmark Straits Times Index lost 0.01% at 3,158.36 points, while the MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.3%. Warehouse operator Global Logistic Properties was the biggest loser on the index, falling 2.1% to $2.74.
DBS Vickers upgraded container shipping firm Neptune Orient Lines to ‘buy’ and raised its target price to $1.45 from $1.26, citing better freight rates and earnings in 2013 compared with this year.
“Cyclical plays like container shipping will be early movers in a global recovery. We prefer liners with more exposure to the U.S. and Intra-Asian routes,” said DBS.
The brokerage noted that as NOL underperformed its peers this year and is still trading below book value, it is set for a re-rating next year.
Shares of NOL were up 1.4% by 11:32 a.m., but have only gained 0.4% since the start of the year, compared with the FTSE ST Industrials Index's 26.2% gain.
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