Franbo Lines Corp (正德海運), a bulk shipper based in Greater Kaohsiung, did not see its shares close at their peak price on the company’s over-the-counter market debut yesterday, reflecting the overall sluggish sentiment in the industry.
The stock climbed as high as NT$14.70 in the middle of the session yesterday, but pared its gains before closing at NT$13.15, up slightly from its listing price of NT$13.
The stock’s advance outperformed the GRETAI Securities Market index, which dropped 1.47 percent, but it was still lower than market expectations as investors felt uneasy about the recent decline in the Baltic Dry Index (BDI) — a measure of shipping costs for commodities.
The BDI fell under the 1,000-point mark to close at 991 points on Wednesday, a decline of 56.48 percent since the beginning of the year and an indication that sentiment in the bulk shipping sector remained low.
Capital Securities Corp (群益證券) expects better supply-and-demand conditions resulting from the industry’s slowing capacity expansion, which should help the sector “bottom out” in the medium to long term.
Despite the weak industry sentiment, Franbo Lines plans to accelerate its fleet expansion, believing it is a good time to grow, with lower costs, it said.
The shipper is set to expand its fleet by one or two per year, raising its total number of vessels to 15 by 2017.
The company currently has seven ships, operating two, while four are rented on long-term contracts and one on short-term contract to other global shippers.
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