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CHINA,SINGAPORE : COSCO up on $220m vessel orders
Publish Date : 07-Jan-2012
Shares of Singapore-listed Chinese shipbuilder COSCO Corp rose as much as 2.7 per cent on Friday, bucking the broad weak market trend, after the firm said it won a contract worth over $220 million from an Asian company for two offshore construction vessels.
At 0345 GMT, COSCO shares were up 1.6 per cent at S$0.93 on a volume of 4.3 million shares, 1.1 times the average daily volume in the last 30 days.
The vessels are scheduled for delivery in the fourth quarter of 2013 and the first quarter of 2014 respectively, COSCO said in a statement.
But analysts are still bearish on the outlook of the company.
\'While the contract is certainly welcome news in the current soft offshore market, margins are likely to remain depressed due to learning curve issues on its earlier contracts,\' Kim Eng said in a report.
\'Bulk shipping newbuilds continue to be dogged by execution issues and low pricing,\' the brokerage added. It maintained its sell rating on COSCO stock and a target price of S$0.72.
