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LONDON (Reuters) - Shipping stocks may still be in the doldrums in the view of many investors, but hedge funds have bet at least $675 million on signs of renewed buoyancy in the industry.
Securities and Exchange Commission filings compiled by Symmetric show.
"Hedge funds are starting to see opportunity ... and are calling the bottom on these companies and there are at least a couple out there getting into this space."
The move by hedge funds comes as signs of a fragile recovery in segments of the global industry are appearing, after a near-decade long slump caused in part by a glut of ships ordered.
"You're looking, over the next two years, for these stocks (in shipping) to rise 50 to 100 percent," said William Homan-Russell, head of shipping at $1.5 billion hedge fund and shipping investor Tufton Oceanic.
"When adjusting for our estimated shipyard costs, share prices are at the lowest prices they've been since 1999."
HIGH AND DRY
Dry bulk shipping - one of the hardest hit parts of the industry - is expected to see better prospects as fleet growth slows and an expected pick up in demand for commodities such as coal, iron ore and grains bolster employment for bulker vessels.
By contrast, oil tankers are likely to see tougher times for now with weak freight rates hitting bottom lines of operators.
Hedge fund ownership of Nordic American Tanker, which ships oil, for example, rose to 27 percent at year-end, from 2.4 percent at end-September, according to the data from Symmetric, which tracks investment funds. Data for earlier periods was not immediately available.
And ownership by hedge funds of Dryships Inc, which is active in dry bulk, tanker and offshore shipping markets, meanwhile, rose to 80 percent, from 10.3 percent.
A spokesman for Blue Mountain declined to comment, while Greywolf could not immediately be reached.
Some hedge funds have started moving into liquefied natural gas (LNG) tanker stocks, investing $4 million in Dynagas LNG Partners, and $62 million in Golar LNG Partners after pulling back from the sector in the preceding three months.
Although other investors pulled back from LNG stocks, a pick up in transport demand has helped the outlook for vessel owners in the LNG sector.
(editing by Alexander Smith)