BDI's first decline after a long sharp rally since end-April. Short-term investors should lock in gains

The Baltic Dry Index (BDI), the barometer of spot dry bulk shipping freight rates, saw its first correction after a long sharp rally since 29 April. The BDI fell 5% last night to close at 4,093. Share prices of dry bulk shipping stocks synchronise closely with the BDI. Most dry bulk shipping stocks have doubled in the recent rally. I recommend short-term investors to lock in gains. The risk of vessel oversupply with the influx of newbuilds from 2H09 remains. Our fundamental view on the dry bulk shipping sector remains UNDERWEIGHT.

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