OCBC Investment Research upgraded container shipping firm Neptune Orient Lines to buy from hold but maintained its target price of S$1.38, citing a recent share price fall despite increasing freight rates.

NOL shares were up 0.4 percent at S$1.21. The stock has fallen about 17 percent from its recent high of S$1.45 on April 3, much further than a 1.5 percent fall in the broader market . "The correction in NOL's share price does not seem warranted," OCBC said.

The Shanghai (Export) Containerised Freight Index was currently 43 percent higher than last year, with Shanghai to Europe freight rates more than doubling, OCBC said. It added that transpacific freight rates were significantly higher than a year ago.

OCBC said shipping liners, including NOL, are profitable at current freight rates. After collectively losing at least $6 billion in 2011, liners are more disciplined in managing shipping capacity and refraining from price wars, it added.

0909 (0109 GMT)

(Reporting by Eveline Danubrata in Singapore, editing by Richard Pullin; eveline.danubrata@thomsonreuters.com)