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2009-6-23 11:48:00 a.m. HKT, XFNA
DJ MARKET TALK: CIMB Downgrades Pacific Basin To Underperform
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| 1137 [Dow Jones] STOCK CALL: CIMB downgrades Pacific Basin Shipping (2343.HK) to Underperform from Neutral on view dry bulk freight rates' "spectacular run" at risk of correction. Puts earnings forecasts, current target of HK$3.65 under review. Notes Baltic Dry Index at 4,070 Friday vs low of 663 on Dec. 5; expects BDI to average 3,000 in 2H09, 2,500 in FY09. Notes China imports of iron ore, coal boomed as domestic alternatives pricier; but adds, pricing gap narrowed significantly, with many dry commodity imports now more expensive vs domestic products. Expects imports of iron ore, coal to moderate in 2H09, leading to lower BDI. "We believe that stock-market valuations have priced in significant positives for the dry bulk sector. Investors should take profit before the expected moderation in China's commodity imports in 2H09." Shares down 6.1% at HK$4.79; HSI down 3.2%. (LES) Contact us in Hong Kong. 852 2802 7002; MarketTalk@dowjones.com
(Delayed by 1 hour)
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