NOL

NOL: Announced that it has joined 5 other lines to form one of the most extensive vessel networks in the world, the G6 Alliance, which will operate in the busiest Far East-EU trade lanes when it begins in Apr 2012. The G6 will have 90 ships employed in 9 services and will call at >40 major Asian, EU and Mediterranean ports.

Members include Hyundai Merchant Marine, Mitsui OSK Lines, Hapag-Lloyd AG, Nippon Yusen Kaisha and Orient Overseas Container Line. Analysts highlight the G6 Alliance, and others before it, will help freight rates recover in 2012.
We note that such a move also could enable the respective mkts to gain mkt share, in an industry where size matters and we do not rule out the possibility of more consolidations and alliances going forward.

Macquarie believes the 6 operators can now better compete with Maersk and MSC/CMA CGM on the Asia-Europe trade lane. However, don’t see a material improvement in rates for the near term, and until there are signs of more fundamental changes through increased lay-ups, scrapping, order cancellation or better end-market demand. Expect the shares to be range-bound. Month-to-date high of $1.18 may act as a near-term cap.