Asia Pacific airline shares generally stronger: Share wrap


The Shanghai Composite Index closed 1.3% higher on Monday, after climbing 10% in Jul-2010 for the largest monthly increase in 12 months. The increase came on the prospect the Chinese Government will reverse policies aimed at slowing the world's third-largest economy after manufacturing in Jul-2010 recorded its lowest expansion in 17 months.

  • Shanghai Composite Index records largest monthly increase in 12 months, signaling a potential reversal of Chinese government policies.
  • Air China, China Eastern, China Southern, and Cathay Pacific experience gains in share prices.
  • Japan's Nikkei average rises, with ANA reporting a narrowed net loss and plans to establish a new LCC.
  • Taiwan stock market rebounds, with China Airlines and EVA Air seeing strong increases in share prices.
  • Singapore and Thailand stock markets reach new highs, driven by positive corporate results and economic recovery.
  • Thai Airways announces joint venture with Tiger Airways, leading to a surge in share prices for both airlines.

Shares in Air China, China Eastern and China Southern all gained yesterday, by 3.8%, 1.8% and 1.6%, respectively, with shares in Cathay Pacific up 1.9%.

Japan's Nikkei average climbed 1.2% on Monday, with ANA shares rising 2.4%, following a 1.0% reduction on Friday. The carrier, on Friday, reported a narrowed net loss and an operating profit in the three months ended Jun-2010, as it benefited from an uptick in international business and tourism travel. ANA plans to establish a new LCC as early as 2011.

See related article: ANA narrows net loss and reports operating profit in June quarter; seeking LCC partners

Also in North Asia, the Taiwan stock market headed back into positive territory again on Monday, with China Airlines' shares increasing strongly, up 7.0%, with EVA Air gaining 5.2%.

In Southeast Asia, Singapore's stock market reached a 15-week high on Monday, due to optimism over corporate results and high dividend payouts, while Thailand stocks reached their highest level in 26 months, supported by the recovery in the economy. Thailand has the best performing bourse in Jul-2010, while Indonesia has been the second-best performer so far in 2010.

Shares in Thai Airways jumped 4.4% yesterday after the carrier announced plans to form a joint venture with Tiger Airways, named Thai Tiger Airways Private Limited, to operate international and domestic point-to-point services. The new JV will be 51:49 owned by Thai Airways and Tiger Airways. Tiger's shares gained 5.4% yesterday, following the announcement.

See related article: Thai Tiger: Thai Airways puts the Tiger among the pigeons. Regional liberalisation the likely winner

In the Indian market, airline stocks were strong in Jul-2010, with Jet Airways' shares rising 27% since 02-Jul-2010, with Kingfisher Airlines' shares closing up 6.6% and SpiceJet shares 9.4% stronger. Shares in Jet Airways and SpiceJet, however, slipped yesterday, both by 0.6%, while Kingfisher Airlines' shares were up by 0.7%.

Asia Pacific selected airlines daily share price movements (% change): 02-Aug-2010

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