Gulf shippers among best opportunties for investors

Investors can plot a course to secure a piece of the action in the Gulf.

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The shipping industry is a notoriously private world.

In Greece and Asia, a number of family businesses own large parts of the sector.

But investors considering buying into regional operators do have some options.

Tanking companies such as Gulf Navigation of Dubai, Nakilat of Qatar and the National Shipping Company of Saudi Arabia (NSCSA) are all traded on the regional bourses.

In addition, as of this week, DP World, the world's third-largest container handler, is now traded on both the Nasdaq Dubai and the London Stock Exchange.

Nakilat, a Qatari liquefied natural gas shipping company, operates 54 vessels worth US$11 billion (Dh40.4bn).

In its latest research note, Nomura Securities said Nakilat was a "defensive" investment with predictable earnings and issued a "buy" rating.

"With Nakilat's shipping fleet essentially complete and contracted on long-term time-charter rates, we see the company's earnings as having reached a steady state," Nomura added.

Meanwhile, NSCSA has been affected by weak shipping rates for oil tankers, as well as dealing with rising bunker fuel prices, leading Nomura to downgrade the company to a "neutral" rating.

Last month, Standard & Poor's upgraded its outlook on DP World to "positive" from "stable".

"The outlook revision reflects our view that DP World's financial risk profile will improve when it has completed the sale of 75 per cent of its shares in DP World Australia," S&P said.

"In addition, DP World's operating performance remains healthy and supportive, in our view, with 8.5 per cent throughput growth across consolidated terminals for the first-quarter 2011 relative to the corresponding period of the previous year."