Shares of COSCO Shipping Energy Soar Over 20% on US-Iran Peace Deal, Anticipated Rebound in Tanker Capacity Utilization

Stock News06-15 09:36

Shares of COSCO SHIP ENGY (01138) surged more than 20%. At the time of writing, the stock is up 20.87% to HK$17.2, with a turnover of HK$295 million.

On the news front, reports indicate that an agreement between the United States and Iran has been reached. It is said that arrangements have been authorized concerning the Strait of Hormuz and the lifting of related naval blockades. Iranian media has confirmed the formal agreement on a ceasefire and understanding memorandum between the nations.

A recent research note highlighted that the anticipated US-Iran deal, which is expected to include shipping arrangements for the strait, has boosted market expectations. Industry players are optimistic about restocking demand and freight rate performance once the strait reopens.

Tanker capacity utilization is projected to return to high levels. This, combined with increased production for inventory replenishment and market control factors, is expected to drive a period of unexpectedly strong market conditions. The longer any strait disruption persists, the more prolonged the restocking phase is likely to be.

The note also pointed out that COSCO SHIP ENGY currently offers a dividend yield exceeding 5%, which is seen as providing support for the stock's valuation floor.

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