On a terrible day for the Tokyo Stock Exchange, shipping shares came in for a particular battering as the market became spooked by the spectre of further bankruptcies.
The dire state of the dry bulk markets has put a number of mid-sized Japanese operators closer to restructuring, sources in the Japanese capital tell Splash. The Baltic Dry Index hit a new low of 293 points yesterday, continuing a dire spiral seen throughout the first weeks of 2016.
Already Japan, home to the world’s third largest merchant fleet, has suffered two very high profile bankruptcies in recent years – Sanko Steamship (for the second time) and Daiichi Chuo Kisen Kaisha.
“There’s a number of lines whose numbers simply do not stack up in the current market environment, saddled by expensive ships and poor charter rates,” one broker said. A banking source added: “We expect to hear of many shipping companies holding urgent restructuring talks with creditors soon.”
The benchmark Nikkei 225 index lost in excess of 900 points today, closing the session at 16,085.44. The 5.4% decline is the largest since June 13, 2013.
Japan’s big three shipping lines all fared miserably on the bourse today – Kawasaki Kisen Kaisha (K Line) down 5.67%, Nippon Yusen Kaisha (NYK) down 7.53% and Mitsui OSK Lines (MOL) down 7.08%.
