Bloomberg News

Maersk Drops as Economic Concern Lowers Rates: Copenhagen Mover

June 21, 2012

A.P. Moeller-Maersk A/S (MAERSKB), owner of the world’s largest container line, declined in Copenhagen trading, snapping a two-day advance, on concerns that freight rates will fall amid slowing economic growth.

Maersk’s B shares dropped as much as 1.2 percent, the biggest intraday decline in a week. The stock fell 0.5 percent, or 200 kroner, to 38,400 kroner at 11:30 a.m. in the Danish capital.

The Shanghai Containerized Freight Index for exports out of China fell 1.7 percent today, the biggest weekly contraction since May 18. Container lines, including Copenhagen-based Maersk Line, have been increasing rates this year to return the industry to profit after overcapacity eroded earnings.

Federal Reserve officials yesterday cut their central tendency estimate for U.S. 2012 gross domestic product growth to 1.9 percent to 2.4 percent, from 2.4 percent to 2.9 percent in April. The Chinese purchasing managers’ index, compiled by HSBC Holdings Plc and Markit Economics, today signaled a contraction in June, which would be an eighth straight month of shrinking manufacturing for the world’s second-largest economy.

Frode Moerkedal, an Oslo-based analyst with RS Platou Markets, said shipping companies need to see demand increase.

“With the U.S. Federal bank lowering its growth forecast yesterday and Chinese economy showing no signs of bottoming out yet, both dry bulk and container shipping markets would be hoping for a revival in demand soon to lend support to weakening fundamentals,” Moerkedal said today in a note to clients.

-- Editor: Frances Schwartzkopff, Alastair Reed

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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