Shares of Singapore-listed Chinese shipbuilder Cosco Corp (COSC.SI) fell as much as 3.4% on Thursday on concerns that the global economic outlook was worsening, traders said.
At 10:50 a.m., Cosco shares were down 3% at $0.985 with 9.2 million shares changing hands. In comparison, the broader Straits Timex Index <.FTSTI> was 1.7% lower.
At 10:50 a.m., Cosco shares were down 3% at $0.985 with 9.2 million shares changing hands. In comparison, the broader Straits Timex Index <.FTSTI> was 1.7% lower.
“The outlook is not good because people are concerned that orders for the whole sector will slow down,” said a local trader.
Citi said in a report it has reduced its order book forecast for Cosco by 23-40% to around $2 billion in 2012-2013 and it sees more margin erosion in both Cosco’s ship and oil rig building operations.
The bank also said that Cosco has been unable to capitalize profitably on its offshore order book and the lackluster Baltic Dry Index suggests that the volume of newbuild contracts and average selling prices will remain depressed.
Some customers may face difficulty securing enough funds upon delivery, Citi added.
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