Danske Bank: Mærsk – container spot rates at new highs

Maersk (MW): Container spot rates {wcidcomp index} continue to break new all-time highs due to a combination of strong demand, lack of containers out of Asia and bottlenecks in the supply chain. Clearly this supports the short term sentiment, earnings outlook and contract rates for 2021. However, we continue to see Maersk as a BBB name as we believe that excess liquidity will be utilised on bolt-on acquisitions and/or further share buy backs. We expect Moody’s to upgrade Maersk to Baa2 from the current Baa3/Positive within the coming 3 months but expect S&P to stay at BBB/Positive Outlook as more clarity on the longer term earnings outlook is needed in our view. We continue to believe that as containers are repositioned rates will decline from current highs which is likely to dampen sentiment regarding Maersk bonds. As this remains a volatile industry in our view we see limited upside in the EUR2026 but more value in the local currency and USD bonds.