Big name shipowners may be lining up to buy dry cargo assets but investors should not follow suit by wading into equities, a leading analyst says.
Jonathan Chappell of Evercore ISI warns it's "too early to be a hero" given likely falls in battered asset values and financial pressure.
"The dry bulk shipping market is experiencing ongoing unprecedented weakness in rates and asset values, and although we understand the desire to be contrarian or to find the diamond in the rough we believe it is just too early to move from the sidelines (or short positions) in an industry with likely further deterioration in fundamentals over the next 12 months, which could begin to result in liquidity squeezes and covenant breaches," Chappell...
