Maersk shares fall as traders assess impact of Trump win on ocean freight rates

Copenhagen-listed shares in A.P. Møller-Maersk (CSE:MAERSKb ) slipped on Wednesday as markets gauged the impact of Donald Trump's victory in the US presidential election on regional conflicts in the Middle East that have threatened shipping activity.

Recent attacks by Iran-backed Houthi militants on vessels in the all-important Red Sea shipping corridor led to a re-routing of shipments, driving freight rates higher and causing traffic snarls at ports in Europe and Asia.

In a preliminary earnings release in October, Maersk said it now expects to post annual underlying income before interest, taxes, depreciation and amortization (EBITDA) of $11.0 billion to $11.5 billion, up from its prior guidance of $9 billion to $11 billion. Both the midpoint of this range and the implied fourth-quarter EBITDA of $2.7 billion top consensus forecasts, analysts at UBS noted.

Maersk raised its forecast for free cash flow by $1 billion to at least $3 billion as well, while global container market volumes are now estimated to grow by around 6% versus a previous projection of 4% to 6%.

But some investors are now wondering if a second Trump term would lead to an accelerated ceasefire in the Middle East, according to analysts at Vital Knowledge. They added that this scenario could in turn place a curb on Houthi attacks, weighing on once-elevated ocean freight rates.

According to the Associated Press and other major news networks on Wednesday, Trump was elected as the 47th president of the United States, defeating Democratic rival Kamala Harris.

The AP made the decision to call the race for the Republican candidate after he won the key battleground state of Wisconsin, the news agency said. Trump had also emerged victorious in a host of other crucial swing states, including Pennsylvania, Georgia and North Carolina.

Source: Investing.com