Reaching an agreement with Houthi armed forces? A.P. Møller - Mærsk A/S denies it, shipping stocks narrow their decline

Earlier reports stated that several shipping companies had reached agreements with Houthi rebels in Yemen to ensure the safe passage of their vessels through the Red Sea. However, a spokesperson from A.P. Møller - Mærsk A/S (Maersk) stated over the phone that the company has not been involved in any negotiations with the Houthi rebels regarding potential safe channels in the Red Sea. The reports of the agreement caused a significant drop in shipping stocks on Monday, with A.P. Møller - Mærsk A/S shares falling by as much as 8%. However, as the agreement was denied, the decline in shipping stocks narrowed. Earlier, the media reported that talks had taken place between the Houthi rebels and shipping companies, resulting in some agreements that would shorten the sailing distance between Asia and Europe, leading to an increase in vessel supply. However, a spokesperson from A.P. Møller - Mærsk A/S stated, "Of course, we would not reach such an agreement." The news of the agreement caused A.P. Møller - Mærsk A/S and Hapag-Lloyd AG to lead the decline in shipping stocks. A.P. Møller - Mærsk A/S shares fell by as much as 8.4%, the largest drop in two months, before narrowing to 4%. Hapag-Lloyd AG saw a maximum decline of 11%, which later narrowed to 7%. In addition, Kuehne + Nagel fell by 3.2%. After the US stock market opened on Monday, ZIM Integrated Shipping fell by 13% and Frontline fell by 3%. Both A.P. Møller - Mærsk A/S and Hapag-Lloyd confirmed that they are still avoiding the region. Kuehne + Nagel stated that, according to their latest information, all major shipping companies are still avoiding the area, which was also confirmed by previous media reports. In recent weeks, shipping stocks have been boosted by expectations that attacks by Houthi rebels would lead to an increase in shipping rates, as major companies avoid sailing in the Red Sea and the Suez Canal. Houthi rebels have attacked at least 24 commercial vessels in the past few weeks, forcing hundreds of ships to reroute around Africa. In addition to the quantity of goods, the distance of the voyage is also a key indicator of ship demand, so these detours have led to a significant increase in shipping costs.