HONG KONG, Aug 1 (Reuters) - Shares in China Shipping Container Lines (CSCL) <2866.HK> tumbled 6.7 percent on Friday, falling to a 15 month low, after Lehman Brothers slashed its target price on the stock by nearly 28 percent on a gloomy industry outlook.
The stock dropped to HK$2.38, a level last seen in late-April 2007. Lehman Brothers cut its target price on the stock to HK$2.1 from HK$2.9 while maintaining its underweight rating on the stock.
China's second largest container operator extended Thursday's 4.5 percent drop after its peer Oriental Overseas (International) Ltd <0316.HK> reported weaker-than-expected earnings on Thursday and warned of more challenges in the second half owing to a demand slowdown and sky-high energy costs.[ID:nHKG134505]
"We expect freight rates to decline due to a continued slowdown in demand, and we think it is unlikely to improve in 2009," said Lehman analysts Andrew Lee and Ceclia Chan in a research note on Thursday.
The brokerage also said weakening Asia-Europe demand in recent times is likely to drive the CSCL stock lower.
