It is a bull run with a difference. Earlier, when the markets boomed, investors in shipping companies usually had little to cheer about.

Shipping company executives used to bemoan in private that the stock markets never rewarded them for their performance. Today the story is quite different.

Shipping company stocks have clearly outperformed the BSE Sensex and the BSE 500 by wide margins. The driver for this has clearly been the surging freight rates.

While the Sensex and the BSE 500 have risen by 70 per cent and 80 per cent, respectively, in the period between March 31, 2003 and October 31, the minimum jump in the price of shipping stocks has been over 100 per cent. The trend continued in November too.

The biggest gainer has clearly been Mercator Lines whose stock price has jumped a whopping 844.47 per cent on the Bombay Stock Exchange. It was traded at Rs 204.95 on November 25 against Rs 21.70 on March 31.

The big three of the Indian shipping industry -- Shipping Corporation of India, Great Eastern (GE Shipping) and Essar Shipping -- have seen price jumps of 223.51 per cent, 271.95 per cent and 320 per cent, respectively, during the period.

SCI which was traded at Rs 50.60 on March 31, jumped to Rs 163.70 on November 25. The comparable prices for the largest private sector player GE Shipping are Rs 38.15 and Rs 141.90.

Essar Shipping's share price has increased to Rs 21 from Rs 5. Varun Shipping's share price too has jumped 167.95 per cent in the same period -- from Rs 9.05 to Rs 24.25.

Even as investors continue to ask themselves if is this for real, another question has now started doing the rounds: Is this rally going to last?

"Investors clearly feel that the freight rates are going to rise for the next few quarters. That accounts for the bull run on the stock markets," says K Ramchandran, head of the advisory desk of BNP Paribas Private Banking.

As far as sustainability goes, it will depend on the next corporate report card he says. Afterwards, it will be time for a realty check.

"The rally will continue till January, 2004. At that point the, current quarter's financial results will be announced. Whether, the rally continues or not will depend on these results," Ramachandran added.

Mukesh Butani, national tax head of Ernst & Young says, "The rally will also depend on the financial strength of individual shipping companies. At present apart from freight rates, what is driving the rally in shipping stocks is the general appetite of the market for old economy stocks like banking and auto."

The dominant feeling among analysts is that despite the rise in stock prices, shares of shipping companies still come cheap compared to that of most other sectors. This they feel is another factor that adds to the sustainability of the rally.

However, a senior executive with a shipping company who spoke on condition of anonymity sounds a note of warning.