Bloomberg News

Maersk Advances on Bets Freight Rate Increases May Stick: Copenhagen Mover

March 12, 2012

A.P. Moeller-Maersk A/S (MAERSKB), owner of the world’s largest container shipping line, rose to the highest price in a week in Copenhagen trading on speculation that increases in freight rates are sustainable.

Maersk rose as much as 1 percent to 45,360 kroner, the highest price since March 5. The stock rose 0.5 percent to 45,160 kroner at 10:04 a.m., making it today’s second-biggest gainer in the Copenhagen 20 index, which lost 0.1 percent.

Maersk Line, the company’s container unit, raised freight rates March 1 on trade from Asia to Europe. It plans to increase prices on its biggest route by an extra $400 per 20-foot container starting April 1. The company also said Feb. 17 that it will cut 9 percent of its capacity on the route in an attempt to restore profits.

“Spot rates on Asia-Europe are holding up,” Nordea Markets said today in a note to clients, repeating a “strong buy” recommendation on Maersk shares. “We are therefore confident that our estimates for Maersk Line are achievable; we foresee a 4 percent higher average rate and a break-even result in 2012.”

Maersk Line will lose money this year, the company’s Copenhagen-based parent, A.P. Moeller-Maersk, said Feb. 27. The container-line industry has lost $11.4 billion after operators undercut each other on voyages to Europe and the U.S. from Asia, Copenhagen-based SeaIntel Maritime Analysis said yesterday.

Dominic Edridge, an analyst at UBS AG, today removed his “short-term sell” recommendation on Maersk shares, citing the rebound in container rates.

To contact the reporter on this story: Christian Wienberg in Copenhagen at cwienberg@bloomberg.net

To contact the editor responsible for this story: Tasneem Brogger at tbrogger@bloomberg.net


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