Time to get out of shipping?

Signs point to share prices tumbling down and investors are advised to plan fast exit strategies.

Share prices for major shipping stocks have fallen up to double-digits, said CIMB in its latest shipping monitor report, but should you stick around the best bet in container shipping is still OOIL with STX Pan Ocean and MISC expected to underperform.

Here's more from CIMB

Negative divergence gives cause for concern. Over the past month, Asia-Europe container freight rates have risen 25% while transpacific rates have risen 11-20%. Yet, the share prices of OOIL, CSCL and NOL have declined 4-14% from their peaks during the past month. Could this suggest an imminent peaking of freight rates?

We expect container rates to peak around Jul-Aug, which suggests that share prices could peak in Apr-May. Investors should, therefore, look for opportunities in the next few weeks to exit the sector which we maintain as a Trading Buy.

Our top pick in the container shipping space remains OOIL. We downgraded Pacific Basin to Neutral last week as freight rates and ship values have been much weaker than expected. Underperforms include STX Pan Ocean and MISC in view of weak sector fundamentals.