NOL - Benefit from strong economic number from US

From Macquarie note:

The stream of positive economic data flowing from the U.S this week would have benefitted most stocks worldwide, but more noteworthy, was the boost it gave seafarers across Asia yesterday. Asia’s largest container shipper Neptune Orient Lines – which draws 57% of its sales from America – jumped 5% yesterday…

Asian seafarers boosted by improving U.S data
Yesterday, seafarers across Asia saw strong gains on speculation that faster than expected increases in trade volume will boost profit.

In Korea, Hanjin Shipping Co., the country’s largest shipping line led gains among Asian seafarers with its 11% spike. Here in Singapore, Neptune Orient Lines (NOL) advanced 5.1% to $2.05 – its highest in a month. The stock is above the $2 mark for the first time since May 18. 

Earnings of carriers to rise on improving U.S demand?
The seafarer rally yesterday came on the back of an improving U.S economy where manufacturing was shown to be leading the U.S economic rebound on Tuesday night. Last night, U.S Industrial Production in May rose 1.2%, more than the expected 0.9%. 

The recovering U.S economy as well as a rebound in trade has triggered a container squeeze as orders for new units plunged during last year’s global recession, causing the worldwide box fleet to shrink 4 percent last year, according to San Francisco-based Textainer Group Holdings Ltd., the world’s largest container-lessor.
Separately, Washington-based National Retail Federation has said that container imports at U.S. ports may rise as much as 15 percent each month through October because of higher consumer spending 

A.P. Moeller-Maersk A/S and Mediterranean Shipping Co. are among carriers levying peak-season surcharges on trans-Pacific trade this year as increasing consumer spending fuels demand. (Bloomberg)

NOL received 57% of sales from the U.S, based on its latest earnings report.

ML's Take:
Technically the counter may have been overbought after the good run over the past few days and looks to take a breather for now. 

Any weakness ahead looks like good buying opportunity with support seen at $1.94-5 region. If the breakout sustain, expect $2.12 to be regained.

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