NOL has released monthly operating data for the period 4th April to 1st May. Container shipping volumes were down 22% yoy (up 2% MoM) compared to a similar level of decline (-22%) in the previous period. YTD volumes are now down 26% versus our 2009 full year forecast of a 9% decline. This implies volumes will be flat yoy for the rest of 2009, which could prove to be optimistic. That said, we expect volume growth to be positive in Q409 given the low base in Q408.

Average April freight rates were down 21% yoy (down -1% MoM), versus a 20% yoy decline in the previous period. We believe the modest increases in Asia- Europe rates from 1 April were unable to offset the further weakening of rates across other trade lanes (especially on Transpacific). YTD shipping revenues are down 39% versus our full year forecast of a -23% decline.

Recent press reports from Lloyds List & SCMP indicate that shipping lines have agreed to a double digit decline (10%+) in Transpacific (TP) rates from May. If this proves to be correct, it is slightly worse than our forecast of a 10% decline in industry TP rates. We continue to expect a severe demand/supply imbalance in 2009.

Our price target is based on UBS’s VCAM model (8% WACC). We estimate a break-up value of $S1.18/$S1.03 in 2009/10E.