Container shares
Sentiment headwinds are growing for the container sector, both related and unrelated to the war. Inflation accelerated by the war. Potential recession in Europe. Consumer confidence risk in the U.S. The possibility of future sanctions targeting China. A moderate decline in spot container rates.
And yet, container shipping shares continue to strengthen. They’re rising despite the war, not because of it.
According to Giveans, container-ship lessors “just keep signing charters for higher rates, locking in cash flows for three, four, five years. They’re less exposed to these near-term headlines.”
Ship lessor Danaos (NYSE: DAC) is up 11% since the start of the war a month ago and 37% year to date (YTD). Costamare (NYSE: CMRE) is up 23% month on month (m/m) and 35% YTD, Global Ship Lease (NYSE: GSL) 13% m/m and 24% YTD.
Container liner operators are more exposed to indirect fallout from the war, Giveans acknowledged. Even so, Matson (NYSE: MATX) is up 15% since the war began and 34% YTD. Shares of Zim (NYSE: ZIM) — based on adjusted closing prices that account for Tuesday’s dividend — are up 33% m/m and 51% YTD.
In Zim’s case, there have been company-specific drivers moving the stock up. “A lot has happened since the war that is very Zim-specific,” said Giveans. “It reported earnings, very strong projections and a dividend that was well above what anyone expected.”
Liner stocks are also being buoyed by investor belief that “port congestion will be persistent,” Giveans added.