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Container carriers losing billions in market value

Maersk Line's October downgrade played a big part in spurring investors to sell shares across the board in the container sector, which eliminated value totaling USD 17 billion last year for the major listed carriers, according to Drewry. Only two carriers receive positive recommendations.

Photo: POLFOTO/AP/Eugene Hoshiko

Investors in the largest listed container carriers noted negative returns of 22 percent in 2015, and their large-scale unloading of container shares erased a total of USD 17 billion in the carriers' combined market value. UK-based analyst agency Drewry draws this conclusion in a review of the listed container carriers covered by the agency, in which just two carriers, German Hapag-Lloyd and Hong Kong-based Orient Overseas (OOIL), receive positive recommendations.

The almost historically poor market conditions last year entailing extremely low rates and a weak demand have continued into 2016 with dark prospects for the rest of the year, for which Drewry projects a total loss among the largest listed container carriers totaling USD 5 billion. In the very pessimistic prognosis, a downgrade is included on container volumes as well as the transparent freight rates along with extra pressure from increased bunker prices, idling and the transportation of empty containers.

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