Shares of COSCO SHIP ENGY (01138) surged more than 6% in early trading, with a gain of 6.28% to HK$16.93 at the time of reporting, generating a turnover of HK$244 million.

Market sentiment has been bolstered by recent geopolitical developments. Qatar and Pakistan issued a joint statement indicating that the first round of high-level talks under the U.S.-Iran memorandum of understanding framework has concluded in Switzerland, with parties agreeing on a 60-day roadmap.

Analysts from Guotai Haitong Securities noted in a research report that the anticipation for the reopening of the Strait of Hormuz has increased following the U.S.-Iran talks, leading to a significant surge in spot freight rates on major routes.

Rates on the Middle East TD3C route have jumped to nearly $500,000 per day, while a transaction at Yanbu was concluded at $230,000 per day. Rates from the U.S. Gulf have risen by nearly 30% to $150,000 per day, and West Africa rates have soared over 80% to $170,000 per day.

In a previous report, J.P. Morgan stated that a potential peace agreement between the U.S. and Iran substantially increases the likelihood of the Strait of Hormuz reopening, serving as a positive catalyst for tanker stocks.

The bank noted that the reopening of the strait would enhance the prospects for normalized crude oil procurement activities and inventory rebuilding, thereby boosting demand for tankers. The firm reiterated its "Overweight" rating on COSCO SHIP ENGY with a target price of HK$27.