MOODY'S: NEGATIVE OUTLOOK FOR ASIA-PACIFIC SHIPPING INDUSTRY

KUALA LUMPUR, Nov 18 (Bernama) -- Moody's Investors Service has given a
negative outlook for three shipping sectors -- dry bulk, tankers, and liners --
in Asia Pacific over the next 12-18 months.

According to its report, the global economic downturn, tightening bank
credit, increased volatility in currencies and financial markets had aggravated
the already surplus shipping capacity amid a sharp drop-off in demand for
shipments of containerised goods, oil, and bulk commodities.

"Such adverse developments may last for an extended period and are the
primary drivers for the negative outlook," it said in a statement here
today.

Peter Choy, the report's lead author and a senior credit officer at
Moody's, said although the credit crisis may result in the cancellation of
some new building orders, a correction in the excess supply from a sizeable
order book would take a long time.

"The dry-bulk sector has suffered the most. A freezing of trade credit has
exacerbated a slowdown in demand for commodities and contributed to the recent,
unprecedented plunge in the sector's Baltic Dry Index," he said.

Elizabeth Allen, a Moody's senior credit officer and the report's second
author, said unstable operating costs resulting from volatile bunker expenses
and lower freight rates had undermined profitability, earnings, and other
financial fundamentals in all three sectors.

"Such instability can put further pressure on ratings, which for Moody's
rated issuers remain stable despite the negative outlooks for the overall
sectors," she said.

On the disparity between rated firms and the rest, Allen said long-term
agreements on many vessels, adequate liquidity through good access to banks,
diversified trade and types of vessels all supported rated shipping companies
such as MISC, BW Shipping, NYK, and MOL.

-- BERNAMA