Shipping shares rise on upcoming China stimulus

MUMBAI: Shares of shipping companies rose early on Thursday on news China's soon-to-be-announced stimulus package for shipbuilders will include a reduction in age limit of vessels.

The move, if passed, would force ship-owners to scrap more existing vessels and reduce the supply of tonnage- a measure of the size or cargo capacity of a carrier- in the industry, in turn stabilising freight rates.

This proposal comes at a time when concerns have heightened that the year 2009 would see the largest supply of shipping tonnage in over 20 years, which is expected to stretch last year's decline in freight rates to the next 11 months. The decline in freight rates was on account of the decline in demand for commodities are slowing due to a global decline in industrial activity.

At 10:38 am, shares of Mercator Lines were up 16.60% at Rs 29.50 , Shipping Corporation India rose 4.35% at Rs 86.40 and Great Eastern Shipping gained 4.4% at Rs185.