Hong Kong: In its latest Asia Shipping Pulse, the highly regarded investment report compiled by Macquarie, the bank reckons the much talked about merger between Cosco and China Shipping is unlikely, and that now is a good time to sell both China Cosco Holdings and China Shipping Container Lines (CSCL) stocks.
“After the recent rebound, we now view the shipping sector as expensive with most companies trading near their mid-cycle valuation while the industry struggles with oversupply,” Macquarie noted.
Describing merger talk as “still some way off” Macquarie also pointed out that mergers between shipping companies “have historically been fraught with failures and may not actually be beneficial to shareholders”.
The bank felt that it further cooperation between the two was likely, perhaps with CSCL joining Cosco in the CKYH alliance. Were that to happen the enlarged Asian container alliance would surpass Maersk in the Asia-Europe market with a 23% share. [15/11/12]