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Cosco shipbuilding stock tumbles to 2-year low in Singapore

Cosco shipbuilding stock tumbles to 2-year low in Singapore

Singapore: Cosco Corp. Singapore Ltd., the shipbuilding unit of China's biggest shipping company, fell to a two-year low in Singapore trading today, Bloomberg reports, on fears a global economic slowdown will hurt demand and affect orders for new vessels.

The stock dropped 7.7 percent, to S$1.56 as of 10:45 a.m. local time, on course for its lowest close since Sept. 13, 2006. Cosco Singapore has plunged 73 percent this year on the Singapore exchange, the biggest drop among the Straits Times Index's 30 members.

Increasing concern that orders for new ships may ease amid a slowdown in global economic growth prompted Merrill Lynch & Co. and DBS Vickers Securities to cut their share-price estimates for Cosco Singapore last week.

"Shipyards are cyclical stocks that will be affected by the global slowdown,'' Bloomberg reported Daphne Roth, Singapore-based head of equity research in Asia at ABN Amro Private Bank, as saying. "Cosco Singapore hasn't won any orders this year and with a lot of orders already contracted, there's concern about oversupply in 2009.'' [15/09/08]