Broad Market Tumbles as Electronics Heavyweights Fall
On October 30, Taiwan stocks at one point plunged more than 1600 points intraday, falling below the 45,000-point mark, and closed down 1156.5 points at 45211.83 points. 台達電 (2308) and 友達 (2409) both hit limit-down, while 台積電 (2330) fell 2.07%. As electronics heavyweights were cut by institutional investors, funds rotated into the shipping sector, with the three major container shippers all closing higher and becoming shock absorbers for the market.
Container Trio Closes Higher as a Hedge
萬海 rose 4.35% to close at 120 yuan, 長榮 rose 4.02% to close at 271.5 yuan, and 陽明 rose 1.5 yuan to close at 63.5 yuan, a gain of 2.42%. While the index fell more than 1,000 points, the three major container shippers remained strong, showing that market funds viewed shipping as a short-term safe haven, with notably resilient performance.
Geopolitical Risks and Strikes Support Freight Rates
The counter-trend strength in shipping is linked to geopolitical risks and European strikes. Recently, escalating tensions in the Middle East, with container ships and vessels reportedly attacked near the Strait of Hormuz, have raised shipping risks and operating costs, driving a rebound in European-line freight rates. A local institution noted that the October 30 strike at European ports lengthened vessel waiting times, caused loading delays and dispatch disruptions, and the resulting congestion reduced effective capacity supply, leaving container freight rates firm in the off-season.
Phased Red Sea Resumption, Institution Maintains Buy
中華民國輪船商業同業公會聯合會 Chairman 蔡豐明 said at the members' representative meeting that from the fourth quarter into next year, the industry still faces multiple uncertainties including the Middle East situation, major route security, and international trade policies, with capacity allocation, route planning, and decarbonization rules all major challenges. 陽明 noted that its PA shipping alliance expects to resume Red Sea transits for 1 Northwest Europe route and 2 Mediterranean routes by the end of 2026, accounting for about 30% to 40% of the alliance's greater-Europe capacity. A local institution believes the phased resumption of Red Sea routes will have limited near-term impact on freight rates, and estimates after-tax EPS for 陽明 of 10.30 yuan in 2026 and 6.83 yuan in 2027, maintaining a Buy rating with a target price of 76 yuan.