Container shipping companies experienced a significant surge in their stock prices in response to the escalating conflict between Israel and Hamas, leading to the suspension of vessel transits in the Red Sea. The growing number of attacks on vessels in the region prompted several carriers to announce diversions around the Cape, driving up investor confidence, according to Alphaliner.
Between Wednesday’s market close and the end of the week, the average stock prices of the seven largest publicly listed carriers witnessed a remarkable increase of over 10%. The intensification of attacks and the redirection of shipping routes contributed to this upward trend.
Israeli carrier ZIM emerged as the primary beneficiary, experiencing an 8% surge in its share price on Thursday, followed by an additional 18% increase on Friday. By the week’s close, ZIM’s stock reached USD 9.64 per share, marking a nearly 30% rise from midweek and reaching its highest level in nearly three months. Trading activity for ZIM shares soared, with 26 million shares exchanged over the two days, more than three times the carrier’s typical daily average.
Other major carriers such as Maersk, Hapag-Lloyd, and OOCL parent OOIL also observed double-digit price hikes over the two-day period, recording increases of 13%, 28%, and 11%, respectively. Asian carriers, including COSCO SHIPPING, HMM, Evergreen, and Yang Ming, experienced more modest gains in the 2-4% range.
The variations in stock prices appeared to be influenced more by the specific stock exchange and investor composition than the trading profiles of the carriers. Notably, ZIM deviated from this trend.
While gains continued into the new week, they started to level out, and in some cases, experienced declines by Tuesday. Despite the notable increases, most carriers still lag far behind their 52-week highs. ZIM and Hapag-Lloyd, for instance, remain down by 60% compared to their annual peaks. On the opposite end of the spectrum, sales candidate HMM and Taiwanese carrier Evergreen Marine closed Tuesday trading at only an 18% deficit from their 52-week highs.
In conclusion, the container shipping sector has witnessed a significant impact on stock prices due to the disruptions caused by the conflict in the Red Sea. The market fluctuations, though substantial, have not brought carriers back to their 52-week highs, illustrating the ongoing challenges faced by the industry.
Sources: Alphaliner, Reuters
