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SINGAPORE : A new series of stock indices is being launched - focusing on the Energy, Offshore and Maritime (EOM) sector in the Asia Pacific. They are among the first of their kind in the world.
DnB Nor Bank said it will also set up a specialised investment portfolio for institutional investors to track some of these companies, and it may soon have offerings for the retail segment.
Shipping firm Cosco is among those poised for brighter times ahead with a recovery in shipping rates.
The company is among those in the region's Energy, Offshore and Maritime sector which DnB Nor said holds good upside for investors. That is a key reason why the bank believes its new series of Asia-Pacific focused indices for the sector will take off.
Teddy Tsai, deputy head of research, DnB Nor Bank, said: "Asia clearly is a growth area. And this index, when we roll it out, makes it easy for the US and Europe investors to play the Asia growth industries within the EOM space."
Paal Karstensen, global head of equities, DnB Nor, said: "In order for Asia to get more attention in the EOM space, we also felt we needed some more products that could give business advice - both long and short.
"So we launched the Asia Alpha product to give investors the opportunity to invest and also hedge their portfolios."
The indices will cover 103 companies with a total market capitalisation of over US$362 billion.
There will be four calculation methodologies: market cap weighted, equal weighted local currency, equal weighted USD, and price weighted USD.
DnB Nor will also launch a new portfolio called Asia Alpha that will allow investors to tap on the sector's growth. Its basket of stocks currently comprises five long and five short positions. These are revised monthly.
The initial stock picks include Hong Kong-listed China Cosco Holdings, and Korea-listed Hanjin Shipping. Other companies it is going long on are Wan Hai Lines, Swiber and Ezion.
Mr Tsai said: "I'm bullish on these companies as a whole, primarily because I think they're very well positioned in terms of investment cycle. We're past the trough in the industry ... the point where a lot of companies can start to invest money.
"And these companies are very well positioned to win new businesses, and to do value-accretive acquisitions."
Among the firms that the bank is shorting include Ezra Holdings because of expensive valuations. It is also pessimistic over SembCorp Marine's prospects because of unsustainable margins and low visibility on its future order book flow.
For now, the new portfolio will only be open to institutional investors.
But DnB Nor is considering offering exchange traded funds in future to retail investors.
Separately, DnB Nor is also expanding its coverage on regional stocks in the shipping sector.
- CNA/al
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