Shares of TransAsia Airways Corp (復興航空), a local mid-sized international carrier, rose by the daily limit yesterday on hopes that the airline will introduce a strategic investor through a stake disposal by one of its major shareholders, dealers said.
In addition, with international crude oil prices on the decline, many investors expect lower operating costs in the air travel sector and an improvement in airlines’ bottom line, they said.
Shares of TransAsia rose by the daily maximum of 7 percent to close at NT$14.25, with 1.69 million shares changing hands, the Taiwan Stock Exchange’s data showed.
Last week, China Development Industrial Bank (中華開發工銀) filed an application with the stock exchange to cut its holdings in TransAsia, but said it was in talks with a certain buyer.
“So, there have been hopes that TransAsia will introduce a strategic investor to improve its operations and boost its profitability at a time when the global airline business is struggling in a slow economy,” Grand Cathay Securities (大華證券) analyst Mars Hsu (徐振家) said.
“As the broader market has gone into consolidation mode after yesterday’s 1.91 percent plunge, investors are targeting stocks like TransAsia that have positive leads,” Hsu said.
In its stock exchange filing, China Development Industrial Bank said it is planning to sell 20 million TransAsia shares, or about a 3.61 percent stake in the carrier. The bank owns a 13.4 percent stake in the airline.
The shareholder said the disposal is simply part of its strategy to strengthen its financial structure.
Since major local airlines, including TransAsia, reported a net loss for the first quarter of this year, the sector has been faced with downward pressure in recent sessions, according to Hsu.
“TransAsia shares staged a strong technical rebound this morning on the back of the strategic alliance leads, which has left the first-quarter losses behind for the moment,” Hsu said.
“Other airlines’ stocks are also moving higher on bargain hunting buying,” he added.
Shares of China Airlines Ltd (中華航空, CAL), the nation’s largest air carrier, rose 2.58 percent to NT$11.95 yesterday, while shares of EVA Airways Corp (EVA, 長榮航空), the nation’s second-largest carrier, climbed 2.29 percent to NT$17.85.
For the January-to-March period, TransAsia reported a NT$0.23 loss per share, while CAL and EVA posted losses per share of NT$0.21 and NT$0.28 respectively.
“The ugly first-quarter results largely reflected weak global demand, which affected air cargo transportation, but their bottom lines could improve on the back of stable international crude oil prices,” Hsu said.
West Texas Intermediate crude for July delivery fell US$0.03 to US$94.25 per barrel in New York overnight, while Brent crude for July contracts dropped US$0.16 to US$102.44 in London.
Softbank Group Corp plans to keep a stake in the chip designer Arm Ltd, even if it sells a partial interest to Nvidia Corp, the Nikkei reported. The companies are negotiating terms, the newspaper reported, citing sources. Softbank might take a stake in Nvidia after it buys Arm, the report said. Nvidia and Arm might also merge through a share swap, and Softbank would become a major shareholder in the combined company, it said. The two parties aim to reach a deal in the next few weeks, the sources said, asking not to be identified because the information is private. Nvidia is the
‘ONE-STOCK SHOW’: Turnover hit an all-time high as TSMC continued to determine the local market’s direction and surpassed Visa in market capitalization The TAIEX early yesterday hit an all-time intraday high on the back of soaring Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) shares, before tumbling back to the previous day’s close as the contract chipmaker could not single-handedly prop up the index. The TAIEX rose more than 400 points in the first 20 minutes of trading to hit a record 13,031.7 points, but later pared its gains to close down 0.01 percent at 12,586.73. Turnover was NT$343.252 billion (US$11.63 billion), the highest in the Taiwan Stock Exchange’s history. TSMC continued to dictate the market’s direction, as its early surge by the daily
Gold surged to a fresh record on Friday, fueled by US dollar weakness and low interest rates, while silver headed for its best month since 1979. Spot bullion is up more than 10 percent this month, as US real yields lingered near record lows. While the ferocity of rallies in gold and silver cooled in the middle of the week, most market watchers predict there might be more gains ahead. Both metals have added about 30 percent this year, with gold and silver exchange-traded funds boosting holdings to a record, as concern about the fallout from the COVID-19 pandemic fuels demand for
MediaTek Inc (聯發科) has hired a former US Department of Commerce official to help it navigate worsening US-China tensions that have already ensnared its customer Huawei Technologies Co (華為). Patrick Wilson, who most recently served as director of the department’s Office of Business Liaison, has been appointed vice president of government affairs at MediaTek USA to lead its public policy initiatives, the chip designer said in a draft press statement seen by Bloomberg News. Wilson previously worked at the Semiconductor Industry Association, where he led the trade group’s dealings with the US federal government. Technology companies with ties to or operations in China