Read Larry Connors' blog – Short Term Trading Strategies
Shanghai Airlines is predicted to win capital injection from the Shanghai government first of all, and then to buy into China Eastern Airlines. As early as July 2008, these two domestic air carriers were reported to be integrated, and some authorities advised China Eastern Airlines to introduce new foreign strategic investors after this merger.
Of course, many uncertain factors still exist in the consolidation scheme, owing to the global financial turmoil and downturn of the civil aviation sector. Both Shanghai Airlines and China Eastern Airlines incurred great losses in the third quarter of this year.
China Eastern Airlines intends to adjust the earlier financing plan, so it announces the trading suspension today. On December 10, 2008, the company agreed to sell 652.18 million Chinese yuan-denominated A shares and 652.18 million Hong Kong Dollar-denominated H shares to its parent China Eastern Air Holding Co. at CNY 3.6 and CNY 1.0 apiece, respectively.
About CNY 3 billion gained from this private placement is to supplement the listed air carrier's working capital. Ultimately, China Eastern Air Holding is to lift its holding in Eastern Airlines to 68.19% from 59.67, and the assets-liabilities ratio of the listed air carrier will sag 3.77 percentage points, said people with the direct knowledge of the matter.
H-share price of China Eastern Airlines has been on the downward path since October 2007, but it is highly expected to rebound on the Stock Exchange of Hong Kong, because it is likely to accept a CNY 3 billion injection from the Chinese central government.
Total net losses of China Eastern Airlines reached CNY 2.292 billion in the first three quarters of this year. In addition, the air carrier's liability ratio had exceeded 98%, which caused much negative influence on its current performance.
The domestic aviation industry faces a serious operation challenge this year. On the one hand, the international jet fuel prices are on the rise continuously, and on the other hand, the macro-economic downturn leads to the declining aviation transportation demand.
With a view to getting rid of the operation predicament as soon as possible, some aviation companies have applied to the Chinese central government for capital infusion for many times.
(USD 1 = CNY 6.84)
Source: www.cnstock.com (December 25, 2008)
More News:
Market Updates |
Stock Alerts |
All Trading News |
Stock Index
About TradingMarkets | Contact | Advertise | Careers | Link to Us | Site Map | Help | Terms & Conditions | Privacy Policy | Return Policy | Testimonials | Feedback
The Connors Group, Inc. ("Company") is not an investment advisory service, nor a registered investment advisor or broker-dealer and does not purport to tell or suggest which securities or currencies customers should buy or sell for themselves. The analysts and employees or affiliates of Company may hold positions in the stocks, currencies or industries discussed here. You understand and acknowledge that there is a very high degree of risk involved in trading securities and/or currencies. The Company, the authors, the publisher, and all affiliates of Company assume no responsibility or liability for your trading and investment results. Factual statements on the Company's website, or in its publications, are made as of the date stated and are subject to change without notice.
It should not be assumed that the methods, techniques, or indicators presented in these products will be profitable or that they will not result in losses. Past results of any individual trader or trading system published by Company are not indicative of future returns by that trader or system, and are not indicative of future returns which be realized by you. In addition, the indicators, strategies, columns, articles and all other features of Company's products (collectively, the "Information") are provided for informational and educational purposes only and should not be construed as investment advice. Examples presented on Company's website are for educational purposes only. Such set-ups are not solicitations of any order to buy or sell. Accordingly, you should not rely solely on the Information in making any investment. Rather, you should use the Information only as a starting point for doing additional independent research in order to allow you to form your own opinion regarding investments. You should always check with your licensed financial advisor and tax advisor to determine the suitability of any investment.
HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN INHERENT LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING AND MAY NOT BE IMPACTED BY BROKERAGE AND OTHER SLIPPAGE FEES. ALSO, SINCE THE TRADES HAVE NOT ACTUALLY BEEN EXECUTED, THE RESULTS MAY HAVE UNDER- OR OVER-COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN.
The Connors Group, Inc.
15260 Ventura Blvd., Ste. 2200
Sherman Oaks, CA 91403
© Copyright 2009 The Connors Group, Inc.
