Shares of shipping company Maersk surged in Denmark for the second consecutive day Wednesday following its decision to extend its hiatus on Red Sea shipments due to safety concerns.
Over the weekend, Maersk announced a 48-hour pause in Red Sea transit in the wake of an attack by Houthi militants on one of its ships. Now, the stoppage has been extended indefinitely, the company said.
Meanwhile, Goldman Sachs (NYSE:GS) upgraded the company’s stock to Neutral from Sell, pointing to higher freight rates caused by the shipping disruptions.
The Red Sea issue is “financially good for the carriers,” Sydbank senior analyst Mikkel Emil Jensen said Wednesday on CNBC’s Squawk Box Europe. “You are pulling out capacity from the market at a time when demand is not very strong.”
Earlier this week, Maersk published a schedule that revealed more than 100 of its ships making shipments in the coming weeks have been diverted.
Notably, avoiding the Red Sea means shipments don’t pass through the Suez Canal to the Mediterranean Sea. Normally, the Suez Canal sees up to 30% of global container trade, according to reports.