Predicting a recovery in shipping rates is a relatively fruitless exercise. The much-quoted Baltic Dry Index (BDI) sits at a mere fraction of its pre-crunch highs and freight rates are volatile. Of course, this makes it incredibly difficult for ship brokers, but if they can keep their heads above water until the tide turns, the rewards for them and investors alike could be handsome.
For that to happen, the US and Europe must grow and, right now, the chances look slim. A funding drought threatens to submerge the mighty Germany shipping industry, too, and Britain's oldest shipping company Stephenson Clarke Shipping is in liquidation. Still, for many, the worst may be over. Volumes and freight rates rose at Danish shipowner Maersk during the second quarter, and the canny Greek owners are doing well. Selling at the top of the cycle has amassed them a fortune and, backed by Chinese financial clout, they're picking up vessels on the cheap. Brokers Braemar and ACM Shipping have seen their share prices rise sharply in the past month, too. Transaction volumes are growing and diversifying into non-broking activities such as salvage and logistics is a smart move. That's especially true at Braemar, so it's time to cast our sell tip (310p, 23 Sep 2011) adrift.
