The depressed dry bulk market could recover partly in 2015 and underlying earnings could improve marginally, according to Drewry Maritime Equity Research (DMER).
In 2014, the value of equity market participants in listed dry bulk companies eroded massively, with many companies losing more than half of their market capitalisation.
At the start of 2014, the market expected earnings to improve on the back of recovery in underlying freight markets, but optimism soon turned to pessimism as the companies failed to meet expectations through the year.
Devanshu Saluja and Rahul Kapoor, analysts at DMER, stated: ”We see a fragile earnings outlook for the Dry Bulk sector with an uptick in demand pushed late into the year. However, moderating supply growth should see better fundamentals emerge through 2015-16 and the improving supply-demand balance should see stock prices stage a modest rebound in 2015.”
DMER has initiated coverage on the Dry Bulk sector with Scorpio Bulkers , D/S NORDEN , Diana Shipping, Navios Holdings and Pacific Basin.
DMER has rated Navios Maritime Holdings and D/S NORDEN as ”Attractive”, while it classifies Scorpio Bulkers as a high-risk, high-reward proposition. DMER remained ”Neutral” on Pacific Basin and Diana Shipping.