Vessel oversupply in Singapore to finally ease off from FY14E

Vessels on order eased to 19% of fleet.

Maybank Kim Eng expects industry oversupply to ease off from FY14E onwards as vessel deliveries slow.

Here's more from Maybank Kim Eng:

Compared to a pre-crisis high of 58%, vessels on order have moderated to only 19% of existing fleet in the industry. Vessel oversupply is the primary cause of pain in the industry, so a moderation in future supply growth would be the best gauge of better industry prospects, in our view.

With the ongoing delivery of new vessels, we expect NOL to return a majority of its expiring charters over the next two years. This would bring its FY13E and FY14E net fleet growth to 2% and 5% YoY respectively, and lower the percentage of fleet chartered to 31% (Dec 2012: 59% chartered).