Shipping stocks in Taiwan are emerging as a defensive trade this week after freight rates climbed and institutional money rotated into the sector, according to ABMedia. The report said hotter expectations for a U.S. Federal Reserve rate hike following the latest inflation data, along with the coming settlement of TAIEX futures, have left the broader market facing thinner turnover and pressure around key moving averages. With upside in heavyweight electronics shares constrained, investors have shifted attention to shipping names.
Red Sea disruption keeps freight markets tight
ABMedia said fighting involving Yemen’s Houthi forces has escalated in recent days. The group was described as having taken the strategic Red Sea port of Mocha and then occupied Perim Island and the Hanish Islands, giving it effective control over Yemen’s Red Sea coastline.
The Bab el-Mandeb Strait links the Red Sea to the Suez Canal and carries nearly 30% of global container traffic, the report said. ABMedia added that the Houthis’ ability to deploy defensive and anti-ship weapons on the islands has shattered hopes for a near-term return of commercial shipping through the Red Sea. Major carriers have been forced to keep rerouting around the Cape of Good Hope, extending voyages and tightening global shipping capacity.
That pressure has fed directly into freight pricing. ABMedia said the Shanghai Containerized Freight Index, or SCFI, has posted gains for six straight weeks, while Europe-bound container futures rose 5% to 9% in a single session.
Saudi pipeline shutdown adds to oil shipping demand
The report said the geopolitical shock has not been limited to sea lanes. Saudi Arabia, which relies on its east-west pipeline to move crude to Yanbu on the Red Sea and avoid the risk of conflict around the Strait of Hormuz, saw that route disrupted over the weekend after a drone strike caused a fire.
ABMedia said the pipeline, with daily capacity of 7 million barrels, was placed under a preventive full shutdown. That left Middle Eastern crude flows under pressure on both sides: risk around Hormuz in the east, and a halted pipeline plus blocked Red Sea export access in the west.
Brent crude then moved above $100, the report said. Global buyers rushed to secure Atlantic Basin crude, stretching ton-mile demand as cargoes traveled longer distances. At the same time, rising war-risk insurance premiums fueled a scramble for very large crude carriers, or VLCCs.
Fund managers rotate into shipping shares
ABMedia said capital in Taiwan’s stock market has started rotating toward shipping companies because the sector is backed by actual gains in quoted freight rates. On the positioning side, the report said domestic investment trusts have been trimming some electronics names that had already posted strong runs and have spent several sessions buying shipping shares on dips.
Container carriers
The report highlighted Evergreen Marine (2603), Yang Ming Marine Transport (2609) and Wan Hai Lines (2615). It said the six-week rise in the SCFI and the prolonged detours around the Red Sea continue to support container freight pricing. Wan Hai was described as showing stronger technical momentum and testing a neckline level, while Evergreen and Yang Ming were said to be holding above their monthly moving averages with signs of institutional buying.
Tanker and bulk names
ABMedia also pointed to Shin Yang Shipping (2605) and Wisdom Marine (2637). It said the shutdown of Saudi Arabia’s oil pipeline and the growing risks around the Persian Gulf have lifted tanker day rates. Shin Yang, which has a VLCC fleet, was presented as a direct beneficiary of longer-haul crude transport demand. Wisdom Marine, a bulk shipping leader, was described as moving closer to an earlier high and showing catch-up potential.
Analyst sees stock picking, not broad market strength
Moore Investment Consulting analyst Lin Han-Wei said the first half of the week is likely to remain capped by Federal Reserve developments and futures settlement, making a broad-based rally in Taiwanese stocks difficult. His view, as cited by ABMedia, was that trading this week should focus on stock selection rather than the market as a whole.
He said the shipping sector carries three advantages at once: a geopolitical catalyst, stronger freight-rate fundamentals and defensive institutional positioning. Before the broader market direction becomes clearer in the second half of the week, he described shipping shares as the primary destination for funds seeking resilience and shelter.