Financial Daily from THE HINDU group of publications
Thursday, Feb 23, 2006
Financial Daily from THE HINDU group of publications Thursday, Feb 23, 2006 |
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Markets
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Stock Markets Logistics - Stocks GE Shipping, Mercator Lines buoyant Jayanta Mallick
Kolkata , Feb. 22 A SECTION of investors boarded GE Shipping on expectation that the proposed demerger of offshore business would take effect this month. The stock registered a traded quantity of 30.25 lakh shares on the NSE and 10.52 lakh shares on the BSE. In terms of value, today's gain was around six per cent.According to shipping industry sources, the current buoyancy in the two shipping stocks - GE Shipping and Mercator Lines - has nothing to do with freight rates. "Both tanker and dry bulk rates have declined significantly in the recent weeks globally. Dry bulk rates have taken higher beating than tanker rates. In fact, dry bulk rates are currently at their lowest point of the cycle and there is hardly any sign of reversal on the horizon internationally," a senior official with a private shipping company told Business Line. Both GE and Mercator have greater weightage in dry bulk than tankers. According to analysts, after the business separation, GE Shipping will be considered a pure high sea transport play. The contribution of the offshore business of the company in terms of revenue is only 12 per cent, while in terms of capital employed is 20 per cent. "Thus, the hive-off should be beneficial for the shareholders of the GE Shipping," said an analyst with an institutional brokerage firm. Mercator Lines, which posted a gain of around 11 per cent to close at Rs 49.45 (traded quantity shot up by five times on the BSE to 5.13 lakh shares), appears to have forged ahead in sympathy. Analysts said that fundamentally nothing has changed for the stock.
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