Sea freight stocks are pricing in positive sentiment from the rising tension in the Red Sea, following recent attacks by Yemen’s Houthis on vessels in protest against Israel’s bombardment and invasion of Gaza.
Stocks in the Thai market such as Regional Container Lines Public Company Limited (SET: RCL) (+7.88%), Precious Shipping Public Company Limited (SET: PSL) (+7.88%) and Thoresen Thai Agencies Public Company Limited (SET: TTA) (+1.69%) rose sharply on Monday as Houthi militants stepped up their assaults during the weekend, which damaged the key route of sea shipping between Asia and Europe.
Egypt’s Suez Canal authority said on Sunday it was closely monitoring the impact of tensions in the Red Sea as 55 ships have rerouted since November 19, while 2,128 have crossed the canal during the period.
Major shipping lines including Maersk and MSC have suspended operations in the Suez Canal. It was reported that MSC’s vessel was attacked last Friday as it was transiting the Red Sea. Even though there were no injuries to the crew, the ship had been taken out of service.
The Red Sea is one the world’s most important routes for energy shipment. Currently, ships are re-routing via the Cape of Good Hope at the southern tip of Africa.
Krungsri Capital Securities (KCS) stated that this has a positive impact on the sentiment for Thai shippers as the latest freight data for Shanghai to Rotterdam route showed 23% growth so far this month. This will also benefit other operators such as Leo Global Logistics Public Company Limited (SET: LEO), Sonic Interfreight Public Company Limited (mai: SONIC) and Triple I Logistics Public Company Limited (SET: III).