Along with the strengthening of international gold and oil prices in the early trading session, some Hong Kong shipping stocks also saw an increase. As of the time of publication, Pacific Shipping (02343. HK), COSCO Shipping (01138. HK), and Oriental Overseas International (00316. HK) have risen by 9.50%, 5.33%, and 4.81% respectively.
Note: The performance of shipping stocks
In terms of news, a report in early trading today pointed out that Israeli missiles hit a target inside Iran. According to a report by Israel's Jerusalem Post earlier on the 19th, explosions were heard in the Isfahan region of Iran, the southern province of Suvida in Syria, the Baghdad region of Iraq, and the province of Babylon. According to the latest report, Israel has launched attacks on Iranian territory, not targeting nuclear facilities.
In fact, influenced by the situation in the Middle East, shipping rates continue to benefit. As previously reported, since Israel launched an air raid on the Iranian Embassy in Syria on April 1st, international freight rates have significantly increased.
Taking European shipping as an example, this variety has accumulated a 32.69% increase from April 1st to April 18th. If today's increase is included, this value reaches 40.98%
Recently, major shipping companies have gradually implemented a new round of price hikes, which has boosted the performance of shipping stocks. It is reported that starting from April 15th, shipping companies such as DaFei, MSC, Herbrot, Maersk, and HMM have successively increased the rates of some routes, involving routes in Europe, South America, Africa, and other regions.
Among them, Maersk announced an increase in May European freight rates, and the freight rates from Shanghai to Rotterdam were adjusted to 1975/3800, a significant increase from last week. Da Fei followed closely and announced an increase in European freight rates to 2200/4000 from May 1st. Market analysis suggests that other shipping companies may also continue to follow suit.
Pacific shipping surged by over 9%
In addition to the boost from the Middle East conflict, Pacific shipping surged by over 9% in early trading. The company announced its operating data for the first quarter yesterday, with the daily average rental rates for the spot market of small and flexible (BHSI 38000 deadweight tons (adjusted)) and ultra flexible (BSI 58000 deadweight tons) dry bulk carriers at $10510 (net value) and $12310 (net value), respectively, an increase of 26% and 27% compared to the same period in 2023.
Pacific Shipping also announced a $40 million share buyback plan. HSBC research suggests that considering the repurchase plan and the expected 50% dividend payout ratio, the overall return on equity of the company is expected to reach 7%. The institution further analyzes and believes that the share repurchase plan may replace the potential special dividend payout this year, and has set a target price of HKD 2.6.