Shares of ZIM Integrated Shipping (ZIM.US) are gaining more than 12% today, after Maersk decided to abandon the return of diverting ships through the Red Sea and the Gulf of Aden, following increased attacks by Huti militants. The company said it will constantly monitor the situation, All the operator's ships near the Red Sea region will be stopped, turned back and take a longer route, through the Cape of Good Hope.
- A few days ago, Maersk decided that the fleet would pass through the Red Sea again, but the risk of escalating tensions finally stopped the company from this decision. Iran decided to send a destroyer-class ship after the U.S. Navy sank three boats of Huti militants;
- Problems in logistics and longer hauls mean an increase in freight charges, which is good for carriers - both their margins and revenues, which have been under pressure for months. Maersk (MAERSKA.DK.) shares also rose today, up 6%.
- ZIM's shares had long traded at a discount to competitors due to geopolitical risks, among other reasons, because as an Israeli company, ZIM's container ships were exposed to attacks more than other carriers
- Reality proved to be 'favorable' for ZIM, as major operators will also divert vessels and not transit through the Suez Canal, increasing sentiment toward ZIM shares
- In addition, the Israeli central bank's first rate cut since the pandemic may improve sentiment around the Tel-Aviv stock market, which is slowly stabilizing 3 months into the war against Hamas.
ZIM shares (H4 Interval)
ZIM shares have halted the temporary correction and are back on the rise, gaining nearly 80% from historical lows, in a matter of weeks. Source: xStation5
