Neptune Orient L Rg   

NOL

   Interesting exchange.  

 

 The price direction of NOL is unclear at this point. However, macro operating environment is largely negative. Looks like the probability of it going down is higher than it going up. I could be wrong. Will watch at the sideline for the time being.

 

Matthew8, I'm just a retail investor. I don't have the financial ability to talk down the shares, unlike fund managers and analysts. They form the bulk of the trading volume. You and I are unable to move the market. Don't fight the market. Follow the trend.



Don't forget that the results have not reflected the spike in crude oil prices since the end of June. Over capacity would last the next 2 years.



If you want to buy, good luck to you.

 

Mathew88,

As much as we value Nostradamus' (or any other contributors) opinions, I doubt it has any, impact on the prices. So, I doubt very much his 'talk down' of NOL will make any diffeence to the share price.

The movement of prices is due to the overall market perception and sentiment.

 

Nostradamus - As a retail trader like you, I have had the opportunity to glue my eye to my radar screen most, if not all the time. Thank you for reminding me of my protective stop loss.

Most of the bad news you posted here were already reported in the Straits Times. So, I see no reason why you want to talk down NOL.

As you had mentioned: "NOL, which is controlled by state investment firm Temasek made a net profit of $67.5 million in the second quarter, down 66% from $196 million last year and below the $120 million in the first quarter."

The fact is - NOL did not made a loss.  On the contrary, it did made a profit.  Anyway, my trading style does not base on fundamentals but on the price action of the counter. What the invisible hand does behind the counter is all that I am concern.

We may have different views, but it is OK. This is one way we can learn from each other.  Cheers!

 

How about Singtel Lee going for a taxi comapny.

 

Matthew8:

I hope you're right. I'm stuck with 10lots at 2.57 bought in Feb.

I hope the rumours that Singtel lee is to head a new company to merge  PSA & NOL comes true, doesn't matter when, then we can laugh our way to the bank.

Cheers, tomorrow will be a good day.

 

Matthew8,  I didn't sell short. Looks like falling again. Remember your protective stop.



Shipping lines worldwide are being hit by falling freight rates after a 3-year boom fuelled by a ship-buying binge that now threatens to tip the industry into overcapacity.



At the same time, rising fuel prices are starting to hurt as shipping lines begin to lose pricing power and are less able to pass these higher costs to their customers.



Freight rates fell almost 8% last year. Freight rates could stabilise as the industry enters the peak season, which should last until mid-Nov. Nevertheless, excess capacity and at the rate the net profit is falling, NOL could turn in a loss in Q3 or maybe Q4.

 

Nostradamus - You seems to have nevative comments on NOL.  I hope you did not sell short NOL.

I just went in this morning at $1.89 and I believe it is moving up.  Anyone want to follow me?

 

Sorry not a loss of US$60m in Q3, but maybe just breaking starting to make a loss.

 

Net profit fell on the back of a fall in the freight rate, a soaring bunker fuel price and weak US$. Net profit of $67.5m in Q2 vs $120m in Q1. At this rate, Q3 could see a loss of sbout US$60m. No wonder the CEO doesn't want to be around to take the rap for the losses. 2007 will be another weak year. 

 

hey singaporegal, you're right about the sudden price movement! Crashed today!

 

Shares of Neptune Orient Lines , which runs the world's eighth-biggest container liner, fell as after it reported it sthird straight quarter of lower profit on Monday and forecast a tough year ahead. NOL, which is controlled by state investment firm Temasek made a net profit of $67.5 million in the second quarter, down 66% from $196 million last year and below the $120 million in the first quarter.



"We believe that the container liner fundamentals will remain very weak until at least 2007," CIMB-GK analyst Raymond Yap said in a client note on Tuesday.



Yap, who downgraded NOL to "underperform" and lowered his price target to $1.70 from $1.88 previously, said demand for container services would grow at a slower pace than capacity, putting further pressure on container rates. Yap also slashed his forecasts by about 40-50% for all forecast years.

 

Nostradamus,

Yes, certainly the alliance rate increase will be a boost...but what is the impact on bottomline? I don't think this alone justifies the recent increase in share price.

But having said that, the counter is still trading at a discount to NAV......i.e P/B < 1.0

 

NOL gained after an alliance of container lines it belongs to announced an increase in rates for moving wastepaper due to higher fuel costs.

 

singaporegal - You may be right from your own observation. However, in a volatile market, it is very difficult to gauge which way the market is heading. Here, we are talking on the general market as a whole.

For individual counters like NOL, its prices also move up and down very fast when the invisible hand is behind the counter. The trick is to buy low and sell high. I follow more on the GA - not TA or FA.

So, I will try my best to follow the Banker (Chng Kay in Hokkien) closely. When the Banker swims up, I will follow. When the Banker swims down, I will also follow behind him. Of course, it is not easy. But, I suppose this is what most of the Remisiers are doing everyday in the trading room. Otherwise, how are they going to survive by waiting for the FA or TA to tell them to buy and sell. It may take them days, weeks or months to just do one trade base on TA or FA

For your information, I am not a Remisier.  I am just a small trader like you.  Thanks for sharing.

 

For NOL, the trend is a little uncertain. But the Bollinger Bands are being squeezed a little and there's a possibility of sudden price movement in about 7-10 trading days.

 

Hi Mathew8,

Thanks for your observation. My comments were more in general. Take the STI or the Dow for example, what happens at the start or open of the day very often doesn't follow through to the end of the trading day. A good example was the Dow last night. It started UP and then crashed DOWN... then ended up flat.

I got burned many times last time if I bought or sold too early in the day and came to realise that if I waited till the afternoon, things would have been more stable then and it would be easier to tell by 3pm if it were a up or down day.

 

Hi Nostradamus,

NOL is a pure container shipping company......albeit they have a logistic division but that is not a major part of their business. Hence, NOL will not benefit from rising BDI rates.

Container rates are on the downtrend and is expected to continue to do so as more new builds are come into the market. This is supported by NOL's monthly operations report. Coupled with high fuel costs, margins are further squeezed.

I believe the recent uptrend in the counter is attributed to rotational plays by the houses in expectation of HY results announcement.

 

Hi singaporegal - To say that big players usually come in the afternoon is not true. NOL's closing price was $1.80 on 3.8.06. Next morning, on 4.8.06, the opening price was $1.82 at 9.00 am. Within ten minutes, it was chased up to $1.86 with heavy volume. Bear in mind that the price would not have moved up without the 'invisible hand' (or big players) behind the counter.

From my observation, this invisible hand can appear anytime during the trading period - not necessarily in the afternoon. You are right to say that everything can change pretty quickly when the invisible hand starts to work.  Happy trading!

 

I guess, like STX PO, it's also benefitting from an increase in the dry bulk freight rate.