Shares in Israeli liner operator Zim rocketed roughly 15% in a single morning’s trading, resuming a rally that has seen the company’s New York-listed shares surge by roughly one-third in a little over a week.
The company’s stock price surge came after shares in larger rival AP Moller-Maersk posted a 6% gain.
Zim shares jumped as high as $13.59 apiece before falling back to $13.12 at noon in New York, representing a 15.2% jump on the prior trading days’ close.
The leap, which Value Investor’s Edge referred to as a “breakout”, led one shipping stock commentator on X to post an image of a robot dog with a flame thrower roasting short positions in the liner operator’s shares.
Aside from retreating modestly on Wednesday and Thursday, Zim shares have been marching steadily upward since 18 April, when they were worth just $9.86 apiece.
The surge came as investors watched rebounding rates on the Shanghai Containerised Freight Index, which reached nearly 1,941 on Friday, a 9.7% bounce from the same time of the prior week.
Earlier in the day, Jefferies analyst Omar Nokta pointed out in a client note that the jump was the biggest swing for the index, a key barometer of the spot market for container freight, since January.
It also marks the highest point since early March.
“Freight rates appear to have been gaining momentum after a lull during much of February and March across the main lanes of Asia-Europe and Asia-US,” Nokta wrote.
“Peak season in both markets typically runs from June to October with a gradual build-up of volumes starting in May.”
Later in the day, Nokta told TradeWinds that there appeared to be no other reason for the steep gain by Zim shares on Friday, other than an apparent short squeeze, when investors betting against a stock buy shares to cover their bets when prices rise.
The graph of Zim’s share bears a striking resemblance to the ups and downs of the Shanghai index, although its position in the eastern Mediterranean trades makes the company particularly exposed to the disruption of the southern Red Sea and the Houthis’ targeting of Israeli-connected shipping, meaning longer routes.
Also, Red Sea violence against container shipping has continued this week, with Maersk and MSC Mediterranean Shipping Company vessels targeted by the Yemen-based militant group.
“Red Sea diversions continue at a high rate with over 90% of normal capacity taking the longer route around Africa, more than offsetting newbuilding deliveries thus far,” Nokta said.
In Copenhagen, Maersk’s Class A shares surged to DKK 10,120 ($1,450), which marked a one-day jump of 6.2%.
