Adani Ports' Stock Slumps as Concerns Over Israel Conflict Impact Haifa Port

2023-10-09 21:46:01

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Adani Ports Stock Drops on Concerns over Israel Conflict

Shares of Adani Ports And Economic Zone, owned by billionaire Gautam Adani, experienced a decline of up to 4.5% on Monday. Investors expressed concerns about a potential escalation of the conflict in Israel, where the company operates a major port. Adani Ports has reassured investors that it is closely monitoring the situation and has a business continuity plan in place.

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Adani Ports' Haifa Port Contribution is Relatively Small

The company stated that the Haifa Port in northern Israel, which it acquired for 4 billion shekels ($1.03 billion) in January, accounts for only 3% of its total cargo volume. Haifa is a vital seaport in Israel, responsible for approximately 99% of the country's goods transportation by sea.

Investor Worries Amidst Conflict Escalation

Investor concerns arise as the Palestinian Islamist group Hamas initiated a substantial military attack on Israel, resulting in the deaths of hundreds of Israelis. Adani Ports' shares have declined by 2.1% this year, while the broader Nifty 50 index has seen gains of nearly 8%.

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Volatile Outlook and Potential Impact on Commodity Prices

Experts predict a volatile period ahead for Adani Ports due to the ongoing conflict, expecting a negative bias in trading. Avinash Gorakshakar, head of research at Profitmart Securities, also highlights the potential impact on commodity prices, extending beyond Israel and Iran.

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Adani Group's Commitment to Israel and Recent Transactions

Despite the current conflict, Adani, the founder and chairman of the Adani Group, affirmed in January that the group would continue to invest in Israel. Earlier this year, Adani Ports completed the sale of its port in Myanmar for $30 million, a considerable decrease from its initial investment in the project.

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Shares of Other Adani Group Companies Also Decline

Furthermore, other listed companies within the Adani Group experienced declines ranging from 1% to 4% on Monday.

Source: Reporting by Sethuraman NR and Indranil Sarkar in Bengaluru; Editing by Dhanya Ann Thoppil

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