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Dry bulk sector bottoming out: JP Morgan

Dry bulk sector bottoming out: JP Morgan

Hong Kong: A report out this morning from JP Morgan suggests the catastrophic dry bulk market is bottoming out and now is a good time to invest in the sector.
"We believe that freight rates are bottoming out," JP Morgan shipping analysts wrote, predicting a rash of scrapping for ships aged 20-years-old or more. Moreover, JP Morgan analysts stressed they felt the recent collapse in the Baltic Dry Index, that sees capesizes trading for less than $7,000 a day, was more weather-related than structural.
JP Morgan cited China Cosco as a buy, noting it was "the most leveraged BDI play for investors with higher risk appetite". Pacific Basin was also cited "for investors who are more risk averse as it has covered c.50% of its revenue days this year and net cash". MOL, U-Ming and Sincere were all deemed worth investing in too.  [02/02/11]

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