Neptune Orient Lines (N03.SG) +1.0% at $2.08, tracking modest gains in most other Singapore blue chips, not expected to head much higher for rest of day, says Dow Jones.

Recent performance generally in line with market’s, +4.0% since beginning October vs STI +3.4% over same period, with near-term outlook hinging largely on 3Q 2010 results, guidance due Oct. 19. 

 

In 3Q 2010, NOL expected to have built on growth momentum in 2Q 2010, when it returned to black with US$99.7 million ($129.2 million) net profit vs US$98.5 million loss in 1Q 2010, US$146.2 million loss in 2Q 2009. 

 

But growth sustainability will be closely watched given growing view that freight rates may have peaked. “There are signs that the super-normal growth we have seen this year is beginning to dissipate, particularly on Asia-Europe (route),” says UBS, which has Sell call with $1.82 target.

 

Notes sector-wide vessel capacity now back to 2008 levels, which could pressure utilization, rates. Stock not expected to test current October $2.12 high.