A.P. Møller – Mærsk A/S (OTC: AMKBY) has implemented a temporary suspension of all cargo movements across the Red Sea and Gulf of Aden following an attack on its vessel by Houthi rebels. Notably, the Danish shipping behemoth resumed shipping operations in that region only a week before, highlighting the formation of a US-headed military division dedicated to ensuring security in the region. The stock of Maersk ended Tuesday’s trading session at $9.56, up 7.17%, or $0.64, from the prior close.
The aforesaid incident, involving the ship named ‘the Maersk Hangzhou,’ saw the use of four small boats by Houthi militants, allegedly backed by Iran. In response to distress calls, U.S. military helicopters intervened. The boats reportedly originated from Houthi-reined territories in Yemen and fired at Maersk Hangzhou with the intention of boarding it. However, the security personnel employed by the vessel returned fire and repelled the Houthi boats. Notably, the Houthi boats came as close as 20 meters from Maersk Hangzhou.
As a means of self-defense, US Navy-operated helicopters engaged and sank three out of the four Houthi boats, resulting in the deaths of the militants. The remaining boat fled the conflict zone. There were no damages to U.S. personnel or equipment, as per the official statement by the US military.
Maersk provided details on the incident, stating that on December 30, Maersk Hangzhou was hit by an unidentified object after crossing the Bab al-Mandab Strait during the journey to Port Suez (Egypt) from Singapore. Despite the impact, the vessel did not catch fire and was able to move along its intended route.
Maersk assured that crew members of the Maersk Hangzhou were safe. The company is now gathering comprehensive data about the incident. In this regard, Maersk is in communication with the Operation Prosperity Guardia (OPG) naval operation and other relevant officials. The objective is to evaluate the security conditions in the region and determine any likely effect on the company’s voyage schedules.
Considering the changing environment, Maersk stressed that it would update investors within a day with relevant information. The decision to temporarily suspend all cargo transportation via the Red Sea and the Gulf of Aden represents a precautionary action taken by the company amidst the recent attack.
The attack on Maersk’s vessel comes amid the ongoing conflict in Yemen and the broader challenges faced by shipping companies operating in areas prone to political instability and conflict.
The resumption of shipments in the Red Sea and Gulf of Aden was initially seen as a positive step towards normalizing operations in the region. However, the recent attack highlights the persistent challenges and uncertainties faced by shipping companies.
Maersk’s decision to temporarily suspend transits is expected to keep the stock range-bound with a slight bearish bias.
The historical price chart indicates that the stock of Maersk is likely to face resistance at $9.75 levels. The next major support is anticipated to be only near $9. Additionally, the ultimate oscillator has made a negative divergence with the stock price. Therefore, we anticipate Maersk stock to undergo a price correction in the days ahead.
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