Shipping line shares fall after alleged Red Sea deals

Denmark’s Maersk and Germany’s Hapag-Lloyd have denied the signing of deals or making of verbal agreements with the Houthi militia to facilitate safe passage through the Red Sea of the shipping lines’ vessels. The denials followed a decline in the share prices of the two companies, following a claim by ShippingWatch that there had been agreements made between shipping companies and the Houthis. ShippingWatch did not name any of the companies.

The previous day the container line ZIM had seen its share price fall significantly after it was reported that its Chinese partner COSCO had decided to withdraw from Israel. However, analysts thought that the “deal” allegation by ShippingWatch might also have been a factor in the decline.

Maersk A/S closed down 5.7% in Copenhagen on Monday, after earlier falling as much as 8.4%, while Hapag-Lloyd was down 8.2% in Frankfurt, after earlier sinking as much as 10.5%. Kuehne & Nagel and Frontline also declined.

Stocks of container companies had risen in recent weeks after predictions that the rebel attacks would see rates go higher.

ShippingWatch said the pact would involve shipping companies agreeing to not go to Israel in return for being allowed through safely.