YZJ Shipbuilding (SGX: BS6) shares are up 5.5% at our pixel time in Singapore today. There is no specific announcement concerning this, no new piece of news. So the general assumption in the market is that this is simply a reverse of the losses of the past few days. The v olume of trading is substantial, by share volume the leading trade on the Singapore market, by value of shares traded, the third. This is indeed a large amount for this stock, with most of the trade happening at the opening of the market and shortly thereafter.
It is possible - as it always is - that something else is going on here. But as we say the general market assumption is simply that investors sentiment has turned slightly and the shares are making up that ground lost last week.
YZJ Shipbuilding share price from SGX
As to what YZJ actually does, it's a shipbuilding yard in Jiangsu, 100 miles upriver from Shanghai. It has the ability to build the usual cargo shipping, with an expertise in container vessels. This area of shipbuilding is rather booming - the business cycle in shipping is looking for new hulls that is. This is shown by how when YZJ said they had slots open for production then European companies bought up that future production overnight.
On he other hand we all also need to know that new shipbuilding is hugely cyclical. That the shipping lines are all buying ships this year then in 3 to 5 then they'll - likely - be buying none and scrapping parts of their fleets too. While that might sound a little cynical it is how the shipping business has worked this past century or so.
The current market view really is just that last week's performance for YZJ was not good, sentiment has turned a little over the weekend, thus the reversal.
