Wednesday, 6 July 2011

DJ MARKET TALK: BNPP Starts Cosco Corp. At Reduce; S$1.54 Target

DJ MARKET TALK: BNPP Starts Cosco Corp. At Reduce; S$1.54 Target 

0331 GMT [Dow Jones] STOCK CALL: BNP Paribas starts Cosco Corp. (F83.SG) at  Reduce with a S$1.54 target. It says interviews with Cosco's Korea, Hong Kong,  and China peers suggest "the bulk carrier shipbuilding industry is likely to  suffer the biggest hit from 2012-2013" due to a mix of reasons, including  further capex cuts by shipping companies, capacity over-supply for both shippers  and yards, and potential poor margins on orders received in 2010-2011. The house  adds, "the market-anticipated asset injection from the parent company is  unlikely in the foreseeable future, according to management." BNPP sees two  trends emerging in 2012: "smaller operators under-quoting new bids to keep the  cash flow and yards running, and order cancellations/postponements in case the  potential supply glut is worse than expected." The house says its 2012-2013  forecasts are about 20% below consensus "and we expect significant earnings  downgrades when consensus starts to realize the severity of collateral damage  from the lower-price orders, CNY appreciation, and inflationary cost pressures."  Shares are up 1.0% at S$1.94. ( 

Sunday, 3 July 2011

Bloomberg : Euro-Area Leaders May Accept Greek Default

Euro-area leaders may accept a temporary Greek default and ease the terms on bailouts to cash-strapped nations as they intensify efforts to resolve the 21-month sovereign debt crisis, officials said.
With Greece being charged about 35 percent to borrow for two years, heads of government meeting in Brussels may cut theinterest rates on loans to it, Portugal and Ireland to about 3.5 percent and double the repayment period to at least 15 years.Europe’s main rescue fund may get the power to buy bonds from investors, help countries recapitalize banks and offer precautionary lines of credit to repel speculative attacks.
Policy makers are meeting for the second time in a month in a bid to calm Greece’s financial distress and inoculate Spain and Italy from it. Their previous crisis-fighting measures failed to placate investors and the sight of markets in turmoil this week drew calls for tougher action from the U.S. andInternational Monetary Fund.
Seeking to ensure bondholders contribute more to bailouts even if that risks a temporary default being declared, the policy makers considered a 90 percent swap of Greek bonds outstanding between now and 2020, said two officials familiar with the negotiations. The talks are focused on a default lasting just a few days, one said.
To contact the reporters on this story: Simon Kennedy in Brussels at
To contact the editors responsible for this story: Craig Stirling at