China Cosco, China Shipping Shares May Continue Gains on Rates By Clare Cheung Feb. 9 (Bloomberg) -- Shares of China Cosco Holdings Co., China Shipping Container Lines Co. and other Asian shipping lines may continue to rise, as investors anticipate rates will recover as global trade grows. Shares of China Cosco, Asia's biggest container line by capacity, have risen 24 percent this year. China Shipping, the second-largest, has surged 43 percent. Neptune Orient, the fourth-largest, has advanced 38 percent. ``The momentum could be sustained as the freight rates continue to improve,'' said Edward Wong, a Hong Kong-based analyst at Quam Ltd. ``The gap between demand growth and capacity growth is narrowing. Demand is strong on global trade growth.'' China Shipping, A.P. Moeller-Maersk A/S and other sea carriers are trying to increase rates this year as global trade expands. Fees have fallen since the second half of 2005 due to a record number of new vessels being put into service, eroding profits for shipping lines. Rates are expected to stabilize this year and rise in 2008, according to a Credit Suisse AG report on Feb. 5. ``The outlook for the container shipping market has turned more positive this year, underpinned by more stable freight rates,'' said Jimmy Lam, a Hong Kong-based analyst at BOC International (Holdings) Ltd. ``Lower or stable oil prices will also benefit the industry.'' Average rates for transporting freight by sea may be flat this year and increase 5 percent in 2008, the Credit Suisse report said. Capacity is expected to rise around 14 percent over the next two years, while demand will probably expand 12 percent during the same period, the report said. Investor Concerns Global trade may expand 7.6 percent this year, according to the International Monetary Fund. Ninety percent of worldwide trade is carried by sea. Some investors are concerned over the durability of the industry's recovery. ``Right now we are investing in anticipation of rising freight rates, but it's not certain,'' said Winson Fong, who manages $2 billion at SG Asset Management in Singapore. ``I don't know how long this buying can last for. The freight rates have bottomed out but how much it will go up?'' ``I will take a more cautious stance towards the industry as a whole,'' said Mona Chung, who helps manage about $950 million at Daiwa Asset Management Ltd. ``There is a concern on trade growth slowdown.'' To contact the reporter on this story: Clare Cheung in Hong Kong at scheung4@bloomberg.net .