Shipping tickers prove lucrative

A series of recent attacks on ships passing through the Red Sea by Houthi forces have pushed up shipping rates, enticing cash streams into shipping stocks.

Many stocks have simultaneously broken through in both market price and liquidity compared to the first months of the year.

Accordingly, ticker VOS of Vosco Shipping JSC closed the trading session on June 5 at $0.69 per share, soaring nearly 67 per cent since the end of April and the highest level since early September 2022.

In addition to benefiting from rising sea freight rates after Houthi attacks, Vosco is getting more attention thanks to expectations of strong profit growth in the second quarter (Q2) of this year.

According to calculations by Smart Invest Securities, Vosco could reap nearly $20.8 million in Q2 profit, about 500 times higher than the same period last year, thanks to the sale of one ship which had fully depreciated to a Greek partner last month.

The income from the deal, at about $16.6 million, will be counted for Vosco's Q2 profit.

Meanwhile, ticker VIP of Vipco Petroleum Transport JSC saw ceiling price increases for four consecutive sessions, helping the ticker to reach $0.67 per share on June 5, marking a 45 per cent jump in more than one month.

VTO of Vitaco Petroleum Transport JSC also jumped to $0.5 per share on June 5, reaching its peak set in April 2022 and up nearly 21 per cent compared to the end of April.

In parallel to higher prices, the liquidity of shipping tickers has also skyrocketed. For example, the average liquidity of VOS in the last two weeks has approximated four million units, with some sessions reaching eight million units, while in the previous months it was only from a few hundred thousand to two million units per session.

The price of ticker PVT of PetroVietnam Transportation Corporation (PVTrans) surged more than 21 per cent compared to the end of April.

Current charter rates for crude oil and petroleum products carriers in the international market are anchored at high levels at $47,000 and $27,500 per day, respectively, according to Bloomberg amid huge market demands, creating a favourable business environment for shipping liners like PVTrans.

According to Tien Phong Securities JSC (TPS), shipping rates are likely to fetch higher in the second half of this year, as tensions in the Red Sea show no signs of cooling and Houthi forces repeatedly declaring they will expanding their attacks to the Indian Ocean and Mediterranean regions.

Besides, the Panama Canal is facing its most severe drought in 50 years due to the impact of El Nino, resulting in reduced traffic and prolonging the time it takes for ships to travel from Asia to Europe, pushing up freight rates.

The demand for freight transport tends to increase during the peak season in the last two quarters of the year. The global shipping market is also reportedly showing signs of container shortages at major ports, which is putting even more pressure on freight rates as the peak season approaches.

In addition to being supported by rising freight rates, shipping firms are also benefiting from falling fuel prices.

Global oil prices have now slipped from the $80/barrel mark to $77/barrel, down 15 per cent from their recent peak in March.

According to calculations by the Ministry of Transport, regarding maritime transport, fuel prices account for the largest proportion of about 35-45 per cent in total costs, so a decrease in fuel prices will significantly reduce cost burdens for maritime transport businesses.

Exporters struggle with escalating shipping costs Undergoing turbulent an 2023 with fewer order, sinking revenues, and reduced profits, exporters are facing further obstacles from early 2024 amidst the soaring shipping costs.

Businesses start to feel impact of Red Sea shipping crisis The Red Sea shipping crisis may put a squeeze on Vietnam-based businesses as it lingers on with no foreseeable end in sight.

Industrial real estate increasingly lucrative More and more businesses are embracing industrial real estate ventures, a segment deemed as having enormous potential for development.

Shipping costs continue to climb Rising logistics costs are eroding profits and forcing exporters to freeze orders, as well as revealing inadequacies in the management of foreign shipping companies operating in the waters of Vietnam.