TUI AG (TUI1), the travel company which owns a stake in container line Hapag-Lloyd AG, jumped the most in almost two months in Frankfurt trading, boosted by gains in shares of Asian shipping companies such as China Cosco Holdings Co. and China Shipping Development (1138) Co.
TUI jumped as much as 7.1 percent, the steepest intraday advance since Feb. 1, and traded up 6.6 percent to 5.77 euros as of 4:53 p.m. in Frankfurt. China Cosco rose 8.3 percent and China Shipping Development climbed 7.9 percent in Hong Kong.
Shipping stocks are cheap amid expected increases in container rates, Timothy Ross and Davin Wu, analysts at Credit Suisse Group AG, wrote in a report today. Liner operators are likely to perform best in the near term, with the next rise in rates scheduled for April 1, they said.
The biggest foreign trading partner of Hapag-Lloyd’s home port of Hamburg is China, which accounted for 3 million standard containers, or 35 percent of total container volume, last year. Singapore and South Korea are the port’s third and fifth-most important foreign trading partners, respectively. Hapag-Lloyd accounted for about half of all containers in Hamburg last year.
Hapag-Lloyd said on March 21 that it had a net loss last year after a price war in the industry prevented it from passing on soaring fuel costs to customers.
TUI, owner of Europe’s largest travel company, is selling a 17.4 percent stake in Hapag-Lloyd to investor group Albert Ballin for 475 million euros ($633 million) to focus on tourism. TUI may divest its remaining 22 percent holding in an initial public offering or sell the stake to third-party investors, it said Feb. 14. The company postponed a planned IPO for Hapag- Lloyd last year because of turmoil in global equity markets.
The Albert Ballin investment group, which comprises the city-state of Hamburg’s government, Klaus-Michael Kuehne, Signal Iduna, Hanse-Merkur, M.M. Warburg & Co. and HSH Nordbank AG, is Hapag-Lloyd’s majority shareholder and will own about 78 percent of the shipping company after the deal has been completed.
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