Chinese airline shares stronger; Thai PM supports Thai Tiger Airways JV
Shares in Hong Kong-listed Chinese carriers were generally stronger yesterday, led by China Eastern Airlines, with a share price surge of 5.5%. Shares in Air China, China Southern and Hainan Airlines, meanwhile, gained 4.3%, 2.4% and 0.9%, respectively, with Cathay Pacific shares increasing 2.9%.
Airline stocks led an increase in the overall Hong Kong market - the Hang Seng Index gained 1.2% while the Shanghai Composite Index increased 1.2% - following last week's wide sell-off of airline stocks.
Also in North Asia, UBS Taiwan lowered its forecast for TAIEX from 7,600 to 7,200 by the end of 2010, with Credit Suisse also reducing its forecast from 8,500 to 7,300. The weighted index closed at 7,668.25 yesterday, rising 0.68%, citing an expected reduction in shipment's by Taiwan's high-tech firms.
However, Credit Suisse added that for old-economy stocks, it favours EVA Air and China Airlines stocks, in addition to Taiwan Fertilizer, Chinatrust, Chunghwa Telecom, Taiwan Mobile and Uni-President.
In Southeast Asia, shares in Thai Airways gained 4.6%, with Tiger Airways shares increasing 1.0%.
The Nation reported that Thai Prime Minister, Abhisit Vejjajiva, stated the Government has no plans to interfere with Thai Airways plans to launch LCC, Thai Tiger Airways, in a JV with Tiger Airways.
However, despite the comments from the Prime Minister, Transport Minister, Sohpon Zarum, stated he still opposed the move, but added that he would not interfere. Thai Airways President, Piyasvasti Amranand, stated the carrier plans to invest approximately USD4.8 billion (THB150 million) over the next five years to improve services and purchase new aircraft.
Asia Pacific selected airlines daily share price movements (% change): 02-Sep-2010
Source: Centre for Asia Pacific Aviation, Reuters & Financial Times