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Singapore's OCBC Bank has downgraded Neptune Orient Lines (NOL) stock from 'buy' to 'hold' after the company posted a net loss for the first three months of this year of US$9.7 million compared to a net loss of US$98 million during the same period in 2010.

"Given the current level of uncertainty in global economic conditions, prospects for Q2 '11 are not rosy. We anticipate a potential slowdown in the automotive industry due to a lack of parts resulting from Japan's earthquake as well as a sluggish global economic recovery," said OCBC analyst Siyi Lim.

OCBC has cut its FY11 estimates to reflect lower freight rates and reduced its fair value estimate to S$2.05 from S$2.70, based on a historical five-year average P/B of 1.25X.

NOL is Southeast Asia’s largest container shipping line and a key purchaser of bunker fuel in the region. NOL Group’s shipping line, APL, currently has 80 vessels calling at Singapore - the world's leading bunker port - making more than 900 port calls at the city-state per year.