Drewry Maritime Equity Research has turned bullish on dry bulk and cautious on tankers.
The company has revealed it has increased its allocation to the dry bulk sector (from 6% to 30%), while pruning exposure to tankers (from 35% to 20%) in view of the changing market landscape.
“We recommend investors to take incremental exposure in the dry bulk segment, which could be the outperformer in 2016. Conversely, we have turned relatively cautious on the tanker segment, but it will still constitute a good proportion of our portfolio for this year backed by high profitability, despite moderation in chartering activity, and lower oil consumption in summer,” Drewry said in a release.
In the dry bulk space, Drewry’s picks include Scorpio Bulkers and Golden Ocean, while for tankers Euronav remains favoured while DHT Holdings has replaced Tsakos Energy Navigation as it is trading at a deep discount and offers “an attractive yield” at the current price, Drewry noted.
Speaking with Splash, Rahul Kapoor from Drewry Financial Research Services in Singapore, explained the change in stance over dry bulk. “Having been bearish on the sector for years at a stretch, we are turning neutral to slightly positive on the dry bulk sector,” he said, adding: “We believe the long-awaited normalisation process has already begun, led by supply side rationalisation; even as we highlight that recovery will be slow, the time to be permanently bearish on the sector has passed. Who would have thought of negative fleet growth in dry bulk shipping just 12-18 months ago?”
