Latest news with #APMoller-Maersk
Business Times
a day ago
- Business
- Business Times
Record short against Maersk backfires in trade-war defying rally
[COPENHAGEN] Shorting the stock of the world's largest listed shipping company during a global trade war may seem like a sure bet. But the investors who've loaded up on the trade since April have so far only been handed big losses. Shares representing just under a third of AP Moller-Maersk's free float are currently out on loan, according to S&P Global Market Intelligence, the highest level since data collection began in 2014. The measure, which is indicative of short interest, is up from about 15 per cent at the beginning of April, when US President Donald Trump announced sweeping plans for import duties on all US trading partners. After an initial plunge when tariffs were announced on Apr 2, the shares are now up about 50 per cent since early April and the Copenhagen-based company seems to be showing little sign that the restrictions are hurting its business. On Aug 7 it raised its 2025 financial forecast, citing resilient global transport demand outside the US. A Maersk spokesperson declined to comment on the share price and the short position in the stock. 'The short interest is basically speculation that tariffs will cause the global economy to slow down a gear, but we just haven't seen that happening yet as the wheels are still turning,' Lars Hytting, an investment strategist at asset manager ArthaScope, which holds Maersk shares, said by phone. 'And Maersk just shows it's best-in-class in a situation like this one.' The trade war is still in its infancy, so there is plenty of time for the short bets to come good. Trump only finalised trade deals with many US partners in recent weeks and some talks are still ongoing. Maersk has warned that tariffs will be negative for its business if consumer confidence declines and consumption slumps. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up A majority of analysts covering the stock are downbeat on the longer term prospects for the company, with the average 12-month price target indicating a decline of some 15 per cent. Still, Maersk chief executive officer Vincent Clerc has repeatedly pointed out that one of the reasons tariffs will not stop global trade is that many products are impossible or very difficult to substitute with local alternatives. As an example, almost all of the world's sneakers are made in just three countries – China, Vietnam and Indonesia – and it would be costly and take years to set up production in the US. 'Things have become more volatile and complex, but this is giving us some enormous opportunities,' Clerc said during an Aug seven presentation in Copenhagen. 'It gives us a positive potential for our logistic business, because the more complicated things are and the more supply chains need to change, the more valuable we become to our customers.' Maersk's ability to thrive during the biggest attack on free trade in decades is the just the latest example of a seemingly negative global event that has ended up benefitting the shipping industry. When transit through the Red Sea was disrupted in late 2023, forcing container lines to sail south of Africa, freight rates jumped because the extra journey effectively reduced the global shipping fleet by 7 to 8 per cent. A similar imbalance to supply and demand was triggered in 2021 when a massive container ship blocked the Suez Canal, helping the industry. And during the Covid pandemic, shipping shares initially fell, before investors understood that lockdowns were a boon for container lines, which benefited from increased demand for consumer goods. According to data from the Danish Financial Supervisory Authority, Marshall Wace was the only hedge fund with a Maersk short position exceeding the reporting threshold of 0.5 per cent of the total share capital, at 0.59 per cent, when the company raised its outlook last week. A spokesperson for Marshall Wace declined to comment. Mads Zink, Danske Bank's head of equities in Denmark, said that the Maersk stock is being shorted because of its current high valuation and because some are using it as a bet that tariffs will harm global trade. 'It may be that their thesis was correct, but the share price hasn't developed the way they might have hoped for over the summer,' Zink said by phone. 'So far, those who have shorted the stock haven't been proven right.' BLOOMBERG
Straits Times
08-05-2025
- Business
- Straits Times
Maersk cuts global container market outlook on tariff war
Maersk said China-US trade has dropped '30 per cent to 40 per cent in both directions. PHOTO: REUTERS Copenhagen - AP Moller-Maersk, the Danish container giant, lowered its forecast for the global transport market rattled by US President Donald Trump's trade war. Maersk set a new outlook for 2025 market development, ranging from a 1 per cent contraction to a growth rate of 4 per cent, according to a statement on May 8, citing 'increased macroeconomic and geopolitical uncertainty.' The forecast compares with growth of 'around 4 per cent' predicted back in February. So far, the trade war 'is mostly a US-China issue, the rest of the world continues unabated,' chief executive officer Vincent Clerc said in an interview on Bloomberg TV. Still, the tariffs have 'already taken a bite' out of the container market in April and volumes in China-US trade have dropped '30 per cent to 40 per cent in both directions as the trade war heats up,' he said, noting that Maersk is less exposed than other shipping lines, because it's biggest trade route is Asia to Europe. Maersk, which controls about 14 per cent of the world's container fleet and operates 60 ports, is among the global companies hit by Mr Trump's protectionist shift, which is upending decades of progress in free trade. Still, the company has also said that it expects a transport boost in Europe as the continent, led by Germany, speeds up investments – including in defense. 'The outlook for global container demand over the remainder of the year remains highly uncertain, shaped by a rapidly evolving trade policy landscape and increasing recession risks in the US,' Maersk said. The second quarter is still set to see growth 'particularly if shippers capitalise on the 90-day pause of reciprocal tariffs by frontloading shipments and building inventories.' Container-line profits have been boosted by the Red Sea crisis, which has now lasted almost 18 months, because companies taking the longer diversion route south of Africa eases some of the vessel overcapacity in the industry. The disruption in the Red Sea is expected to continue throughout the rest of 2025, the Danish company said on May 8. In February Maersk had indicated that would mean hitting the high end of its 2025 profit outlook. In the latter part of the year, the global transport market faces two scenarios: a growing risk of demand contraction or the possibility that trade rebounds if tariffs are rolled back, Maersk said. It expects to grow in line with the market. Maersk left its profit outlook unchanged, projecting 2025 underlying earnings before interest, tax, depreciation and amortization (Ebitda) in a range of US$6 billion to US$9 billion. In the first quarter, Ebitda rose 70 per cent year on year to US$2.71 billion, topping analyst estimates. Growth was driven by higher freight rates and cost control, and supported by higher volumes, Maersk said. BLOOMBERG Join ST's Telegram channel and get the latest breaking news delivered to you.
Business Times
08-05-2025
- Business
- Business Times
Maersk cuts global container market outlook on tariff war
[COPENHAGEN] AP Moller-Maersk, the Danish container giant, lowered its forecast for the global transport market rattled by Donald Trump's trade war. Maersk sees global container volume market in the range of 1 per cent decline to growth of 4 per cent this year, according to a statement on Thursday (May 8), citing 'increased macroeconomic and geopolitical uncertainty.' The forecast compares with growth of 'around 4 per cent' predicted back in February. Maersk, which controls about 14 per cent of the world's container fleet and operates 60 ports, is among the global companies hit by Trump's protectionist shift, which is upending decades of progress in free trade. Still, the company has also said that it expects a transport boost in Europe as the continent, led by Germany, speeds up investments – including in defence. Container-line profits have been boosted by the Red Sea crisis, which has now lasted almost 18 months, because companies taking the longer diversion route south of Africa eases some of the vessel overcapacity in the industry. The disruption in the Red Sea is expected to continue throughout the rest of the year, the Danish company said on Thursday. In February Maersk had indicated that would mean hitting the high end of its 2025 profit outlook. Maersk still expects 2025 underlying earnings before interest, tax, depreciation and amortization in a range of US$6 billion to US$9 billion. 'With trade tensions flaring up and uncertainty on the rise, global supply chains are once again in the spotlight,' chief executive officer Vincent Clerc said in the statement. BLOOMBERG
Japan Times
03-03-2025
- Business
- Japan Times
U.S. tariffs, easing of Middle East tensions threaten reversal of shipping boom
Global shippers from AP Moller-Maersk to Cosco Shipping Holdings, which logged windfall earnings last year, may see a reversal of fortunes in 2025 as a potential reopening of the Red Sea route and punitive U.S. tariffs loom. Plans by U.S. President Donald Trump to introduce new import levies are damaging trade, while the prospect of a lasting ceasefire in the Middle East could redirect traffic back through the Suez Canal, driving rates lower. Global liner rates fell 5.9% sequentially in the week ended Feb. 27, after earlier breaking below $3,000 per 12-meter container for the first time since early May, according to World Container Index data. The Shanghai Containerized Freight Index has lost 57% from its peak in July.
Arab News
31-01-2025
- Business
- Arab News
Stability ‘returning to Red Sea'
CAIRO: Suez Canal Authority Chairman Osama Rabie has told shipping giant AP Moller-Maersk there are signs of stability returning to the Red Sea, and urged the company to take that into account when planning sea routes, according to a statement from the SCA. The statement said Rabie made the comments at a meeting with the CEO of the Danish container shipping group and other senior executives but did not say when the meeting took place. 'We seek to take into account the positive indicators observed in the Red Sea region when planning maritime schedules in the coming period,' Rabie was quoted as saying. Several major global shipping companies have suspended Red Sea voyages and rerouted vessels around southern Africa to avoid potential attacks from Houthis. Egyptian President Abdel Fattah El-Sisi said in December the disruption had cost Egypt around $7 billion in revenues from the Suez Canal in 2024. Last week, Maersk said it would continue to divert vessels away from the Gulf of Aden and the Red Sea and toward the southern tip of Africa despite the Houthis announcing they would curb their attacks on ships. Houthis have carried out more than 100 attacks on ships since November 2023 and sunk two vessels, seized another, and killed at least four seafarers. Meanwhile, the volume of goods moving through Spanish ports rose by 6 percent in 2024 after they became the first point of call in Europe for many companies sending their goods around southern Africa. The state port agency said Las Palmas in the Canary Islands and Barcelona saw 13 percent and 9 percent increases in volumes of merchandise, bulk liquids, and dry bulk last year. 'The situation has caused some specific peak moments of extra activity, to which Spanish ports have adapted,' the agency said, adding it expected higher port traffic to continue as instability in the Red Sea persists. 'Carriers will want to be assured there is an outlook for long-term safe passage before returning to the Red Sea to avoid further massive disruption if the situation deteriorates and they are forced to divert around Cape of Good Hope once again,' said Emily Stausboll, a senior shipping analyst at freight platform Xeneta. The traffic of goods moved in containers through Spain's ports rose by 11 percent last year, while Spanish ports also recorded an increase in vessels bunkering to prepare for longer routes, the agency said. In 2023, the ports saw a 4.5 percent decline in container traffic. According to two executives in the local fashion industry, some Spanish retailers shipped more goods by air to meet demand because of the additional two weeks required to ship goods to Europe via southern Africa.
