[I-bank focus]Barclays upgrades Pacific Basin to overweight

    Barclays Research upgraded Pacific Basin Shipping (02343) to "overweight" from "equal weight" but lowered the target price to HK$4.3 from HK$4.8.
  The house said the upgrade is primarily valuation driven. Following a 22% decline in the share price in the past month, relative to a 5% decline in the Hang Seng Index (HSI) over the same period, it sees value as emerging. The house cuts the target price based on an unchanged target P/B multiple of 0.9x applied to its revised 2014E BVPS of HK$4.77 (lowered from HK$5.33).
  Barclays expects Pacific Basin to suffer a net loss in 2014E, primarily driven by the recognition of impairment charges and weaker-than-expected freight rates. It also expects earnings to swing to profit in 2015-16E, driven by a modest recovery of the BDI by 7% pa and continued outperformance of its Handysize/Handymax fleet relative to the spot market. It lowers its 2014E earnings for Pacific Basin to a loss per share of US$0.06 (from a positive EPS of US$0.03) to reflect impairment charges of US$0.04/sh related to towage assets and an underlying loss per share of US$0.02 due to weaker-than-expected freight rates.