Transport container stocks witnessed a significant downturn earlier this week following rumors of a potential “safe passage” agreement in the Red Sea between certain carriers and Yemeni Houthi rebels. On Monday, container stocks experienced widespread drops after reports suggested that some carriers had engaged in discussions with the rebels, allegedly resulting in agreements for safe movement through the area in exchange for avoiding stops in Israel. No subsequent confirmation of these agreements has been made. Both Maersk and Hapag-Lloyd reportedly denied the reports, leading to a rebound in their stock prices on Tuesday.
The maritime transport sector had shown strong performance in European stock markets during the first week of the new year. Despite recent gains stemming from disturbances in the Middle East, container shipping stocks remain well below their 52-week highs. Analysts predict that the sector will underperform significantly compared to the S&P 500 in 2023.
An analysis reveals that most shipping companies experienced substantial declines in their stock prices last year. Maersk and Hapag-Lloyd saw a 23% loss in value from January to December, while ZIM experienced a more significant drop of 43% (see table on the left). With recent gains, the gap has narrowed for Maersk, Hapag-Lloyd, and ZIM to 12%, 15%, and 25% below their initial 2023 prices, respectively.
Matson, listed in the United States, has been an outlier in this group, consistently defying the trend. The company recorded a remarkable increase of over 75% in its stock price since January 2023. Despite experiencing a substantial drop in earnings, Matson’s U.S.-listed Shipping line continues to boast significantly higher profits than pre-COVID levels, thanks to its transpacific expansion during the pandemic. Breaking the trend, Matson reported higher earnings in the third quarter compared to the second quarter.