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Maersk shares fall to a three-month low amid prospects of Gaza deal reopening Red Sea Route

Maersk's shares fell Thursday, as investors hoped that a Gaza ceasefire agreement would allow for the eventual restoration of container shipping routes via the Red Sea and Suez Canal. This would ease a capacity shortage which has been supporting freight rates.

Israel and Hamas reached an agreement on Wednesday on the first phase in President Donald Trump's plan to rebuild Gaza. This has raised hopes that the Houthi forces of Yemen, which are aligned with Iran, will stop their attacks against commercial shipping on the Red Sea. Since late 2023, such attacks have forced shippers south of Africa to reroute their shipping.

The Houthis are yet to make any comments on the ceasefire agreement or indicate a policy shift. The group has claimed responsibility for the attack on a Dutch-operated ship last week.

At 1025 GMT the shares of the Danish shipping company fell 2%, reaching their lowest level since July 8.

Analyst Mikkel Emil Jensen of Sydbank said that "Maersk's share price is declining due to expectations of further reductions in freight rates, in conjunction with an increased probability of safe passage across the Red Sea."

Analysts warn that shipping companies will likely wait for months to receive assurances of a ceasefire.

Maersk's spokesperson confirmed that the group would only consider returning to transit the Red Sea once a viable and long-term security solution was established.

It said that there was a "clear link" between the security threats in the Bab al-Mandab Strait, and the conflict in Gaza. However, it is still too early to tell how the progress made in Gaza would affect the Red Sea situation.

We hope that this agreement is the first step towards ending the conflict and creating lasting peace.

Analysts at Sydbank, ABG Sundal Collier and Sydbank believe that a return to Suez will increase the available shipping capacity, and further pressurize freight rates. These have already dropped from their peaks in early this year. Vera Dvorakova is reporting. Stine Jacobsen & Anna Ringstrom (Writing & Editing)

(source: Reuters)