STX PO Outlook

STX Pan Ocean (V33.SG) reverses early gains, heads lower as worries over outlook for shipping rates weigh; share down 4.4% at S$2.61. Korean-listed shares (028670.SE) down 5.0% at KRW1,980. Stock had earlier shrugged off continued slump in Baltic Dry Index (BDI) as investors appeared to have taken view that weaker shipping rates priced in, but share now in negative territory, suggests some investors worried that BDI could continue to tumble, putting stock under pressure. "STX Pan Ocean's share price is a mirror image of the BDI, it's a trading stock and there's no point trying to bottom fish it when the BDI is going to keep falling; it's like trying to catch a falling knife," says analyst at local house. Foreign house analyst says parent STX Corp.'s (011810.SE) plan to issue 5.39 million common shares to raise KRW307.84 billion not impacting STX Pan Ocean share. Singapore share now below support at S$2.68 (78.6% Fibonacci retracement of rise from March 20 low of S$2.32 to May 20 high of S$4.00) with next key support tipped at March 20 low of S$2.32.