Wednesday, September 25, 2013
NOL: OCBC maintains Sell with $0.95 TP. House note that despite industry wide efforts to push through general rate hikes, freight rates according to the Shanghai Containerised Freight Index show continued softening in Sep instead. With the traditional 3Q peak season weaker than expected and drawing to a close, likely to see freight rates subsequently head lower in 4Q13 as demand typically drops off, further affecting the ability of liners to force through rate hikes for the remainder of the year. House forecasting a much smaller core operating profit for NOL in 3Q13 and another loss-making 4Q13 to end a disappointing 2013. In light of the weaker outlook for 2H13 and beyond, maintain SELL on NOL with an unchanged fair value of S$0.95. The lack of any near-term catalyst compels house to keep P/B peg at 0.9x.