Harvey set to negatively affect H2
QTD VLGC spot rates signal a weak Q3, and we have cut our estimates for Avance Gas accordingly. Meanwhile tropical storm Harvey is set to delay US exports, which would be negative for VLGC spot rates as the 27% decline in US exports since April is the main reason behind the current low rates. The level of inventory build and impact on arbitrage depends on the level of production, which is uncertain. We reiterate our BUY recommendation and NOK34 target price.Avance Gas Holding is principally engaged in the transportation of Liquefied Petroleum Gas ("LPG"). Co. operates a fleet of 14 Very Large Gas Carriers, providing transportation services to oil majors and traders of LPG on a global basis. Co. transports LPG from the Middle East and the U.S. Gulf or U.S.loan facility from BCBloan facility from BCB(excludes dividends satisfied by issue of shares) East Coast to destinations in Europe, South America and Asia.
DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.
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