Neptune Orient Lines: May fall as container shipping group's latest operating data shows no let-up in pressure on freight rates. Average rev per box for 4 wks ended Nov 12 -4.1% sequentially, marking 3rd straight decline, despite volume +3.2%....
Deutsche Bank, which has Sell call with $1.61 target, expect rates to continue falling for rest of 2010 & remain weak in early 2011. Tip newbuild supply to continue coming on, with demand outlook not able to absorb supply. Add that while investors have so far "complacently dismissed rate decline as a normal seasonal slowdown", weakness in 4Q10 rates will be enough to shave 70%-80% off grp’s earnings for current quarter vs 3Q10, which will prove to be a negative catalyst. Support tipped at cur
Macquarie meanwhile maintains Neutral Call, with TP of $2.25, while UOB maintains Buy with $2.55 TP.
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