The situation in the Middle East has once again become the focus of the market. Pacific Shipping surged more than 9% to lead the sector ·  Apr 19 14:44

① What is the current state of the conflict between Israel and Iran?

② What is the reason for the surge in Pacific Shipping?

As international gold prices and oil prices strengthened for a while in early trading, some Hong Kong shipping stocks also rose. As of press release,$PACIFIC BASIN (02343.HK)$An increase of more than 9%,$COSCO SHIP ENGY (01138.HK)$,$OOIL (00316.HK)$Up about 4%.

In terms of news, a report in early trading today indicated that an Israeli missile hit a target in Iran. According to a report by Israel's “Jerusalem Post” earlier on the 19th, explosions were heard in Iran's Isfahan region, southern Syria's Suwayda province, Iraq's Baghdad region, and Babylon province. According to the latest reports, Israel launched an attack on Iran, and the target was not a nuclear facility.

In fact, due to the situation in the Middle East, shipping freight rates continue to benefit. As previously reported, international freight rates have risen markedly since Israel launched an air strike on Iran's embassy in Syria on April 1.

Take European shipping as an example. This product increased by a cumulative total of 32.69% from April 1 to April 18. If today's increase is taken into account, this figure reached 40.98%

Meanwhile, a new round of price increases for major shipping companies has recently been gradually implemented, thereby boosting the performance of shipping stocks. According to reports, since April 15, shipping companies such as Dafei, MSC, Hapag-Lloyd, Maersk, and HMM have successively raised rates on some routes, involving routes in Europe, South America, and Africa.

Among them, Maersk announced an increase in European freight rates in May, and the Shanghai to Rotterdam freight rate was adjusted to 1975/3800, which is a significant increase from last week. Dafei followed suit and announced an increase in European fares to 2200/4000 starting May 1. Market analysis suggests that other shipping companies may also continue to follow suit.

Pacific Shipping rallied strongly and rose more than 9%

In addition to being boosted by the Middle East conflict, Pacific Shipping's stock price rose strongly by more than 9%. The company released operating data for the first quarter yesterday. Among them, the average daily rent levels for Xiaoling (BHSI 38,000 dwt (adjusted)) and Super Flexible (BSI 58,000 dwt) dry bulk carriers in the spot market were US$10,510 (net worth) and US$1,310 (net worth), respectively, an increase of 26% and 27% over the same period in 2023.

Pacific Shipping also announced a $40 million share repurchase program. In response, HSBC research indicates that considering the repurchase plan and the expected 50% dividend ratio, the company's overall return on equity is expected to reach 7%. The agency further analyzed that the share repurchase plan may replace this year's potential special dividend payment, while providing a target price of HK$2.6.


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