Cathay Pacific shares set to continue slide in long term: analysts

Source:Global Times Published: 2019/8/20 19:52:25

Shares in Hong Kong's flagship airline Cathay Pacific Airways are not likely to reverse their downtrend in the near future, analysts told the Global Times on Tuesday.

The company's shares have seen a cumulative slump of 15 percent in the past three months, media reports said.

Cathay Pacific shares have been on a slide during the protests in Hong Kong. 

Its shares ended 0.37 percent lower at HK$10.66 ($1.36) on Tuesday. Last week, its shares hit a nine-year low at HK$9.55, taking the loss in the company's market capitalization to more than HK$10 billion since July 18.

ICBC International downgraded its rating to "strong sell" while adjusting its target price down by 39 percent to HK$6.

"Cathay Pacific is like a barometer of Hong Kong's economy since it takes up 80 percent of the region's aviation market," said Guo Ning, an aviation industry analyst.

As the local economy has been severely damaged due to the turmoil, Cathay Pacific's shares naturally reflect its fundamentals, Guo told the Global Times on Tuesday.

There is no sign that Cathay Pacific shares will make a genuine rebound in the near future as the damaged economy will take a long time to recover, according to Guo.

The Hong Kong-based airline has been recently embroiled in criticism due to its reluctance in drawing a line with its radical employees in the Hong Kong Special Administrative Region (HKSAR).

In a Sunday statement, the airline stressed that it opposed any illegal activity or violence that challenged the laws of the HKSAR.

One of its pilots, Jeremy Tam Man-ho, resigned on Tuesday, the company confirmed with the Global Times, following two senior executives' resignation. 

On Friday, CEO Rupert Hogg and Chief Customer and Commercial Officer Paul Loo resigned due to the recent events that have caused the airline's commitment to flight safety and security to be questioned, and tainted its reputation, while the company stressed it fully supports the Basic Law and "one country, two systems" principle.

Cathay Pacific said Monday that its sales counters in the Hong Kong International Airport were shut temporarily as the airport authority was beefing up security on the premises.


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