From Red Sea effect to overcapacity: Tide may be turning for Asean shipping stocks

A RISING tide lifts all boats, and right now, the tide is lifting a flotilla of shipping stocks. Sailing route disruptions have pushed freight rates up, buoying investor sentiment, although analysts have warned that the optimism may not be sustainable.

The sector will soon face overcapacity, they said, arising from lower demand and deliveries of record orders in the past two years.

The Business Times screened for shipping-related stocks with market valuations of over US$100 million and which are listed in six Asean countries – Malaysia, the Philippines, Indonesia, Singapore, Vietnam and Thailand. Their share prices have gone up by between 5.6 per cent and 64.2 per cent in the month to Jan 16.