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Asian stock markets tumble amid Dubai concerns; yield weakness remains a concern for Asiana


Asian stock markets tumbled on Friday (27-Nov-2009) as concerns over losses from Dubai's debt problems unnerved investors worldwide.

In Tokyo the Nikkei 225 dived 3.2%, while Hong Kong’s Hang Seng was down 4.8%. Elsewhere, the Seoul Composite shed 4.7%, while China’s Shanghai Composite fell 2.4%, with the Australian All Ordinaries also off by 2.8%. India's BSE 30 was down 1.3%, while the Singapore Straits Times fell 1.1%. (However, in mixed early trades in Asia today, sentiment appears generally more positive)

Spicejet unaware of any change by 13% shareholder, Istithmar

In related news, SpiceJet stated it was unaware of any changes in the investment strategy by Dubai World's Istithmar, which owns 13% of the LCC. SpiceJet shares were down by 4.4% on Friday, having fallen by as much as 7.7% in intra-day trading.

Emirates “confident” it will not be affected

Emirates Airlines President, Tim Clark, in an interview with the UK’s Sunday Telegraph, stated he remains confident that the airline will not be affected by the restructuring of Dubai World.

Mr Clark added, “we are all a bit shocked by what's happened and the global fall-out of the past 48 hours. But Dubai will navigate itself out of this, as will we. I am confident that the airline will not be affected by this. We have independent sukuks [Islamic bonds] and bonds, which are maturing in 2010 and 2011. I know people expect us to repay or refinance them on schedule and we will, most absolutely. If there is more turbulence then we will moderate our growth to account for this but we're not going to stop growing, this is a great business”.

Asiana yield weakness continues

Asiana Airlines’ shares were down 4.4% upon the release of the carrier’s 3Q2009 traffic highlights, which revealed continued yield pressures for the South Korean airline, with passenger yield down 14.1% and cargo yield down by 16.4% in the quarter.

See related article: Asiana Airlines seeing continued yield contractions

Thai Airways yield remain “very low”

Elsewhere, Thai Airways shares were down by 1.8% on Friday, as Thai Airways President, Piyasvasti Amranand, stated that while passenger traffic is improving, yields have remained “very low” due to the high level of competition. Mr Amranand added that the carrier “might” break even this year and stated the carrier  expects to see improved demand in 2010 and 2011

Air China’s increased shareholding in Cathay Pacific approved

In China, Air China and Cathay Pacific’s shares were down by 6.0% and 3.2%, respectively, following the completion of a share transaction, as part of which Air China's shareholding in Cathay Pacific has increased to 1.2 billion shares, representing approximately 29.99% of the issued share capital of Cathay Pacific.

Asia Pacific selected airlines daily share price movements (% change): 27-Nov-09

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