[Travel News]: Cathay Pacific bonds show investors unnerved by industry gloom as China’s outlook darkens
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The following is the [Travel News]: Cathay Pacific bonds show investors unnerved by industry gloom as China’s outlook darkens from [SCMP] recommended by TheTourAttraction.com:
Carriers banking on China’s aviation recovery struggle as a resurgence in Covid-19 cases in many provinces hits outlook.
Investors in Cathay Pacific’s foreign-currency bonds are getting worried again about the outlook for the city’s flagship carrier as prices drop. An improved operating data has failed to clear the gloom dogging the industry for the past year.
The embattled airline narrowed its first-half losses to HK$7.6 billion (US$977 million) from HK$9.9 billion a year earlier in a report to shareholders this week, while cautioning investors the Covid-19 pandemic would still have a severe impact on its business.
A resurgence of Covid-19 cases in mainland China is worrying investors as authorities continue to shut borders to contain the virus, adding to a sudden slump in domestic traffic and economic recovery prospects. Cathay Pacific could lose its unused runway slots at overseas airports, too, because of Hong Kong’s tight restrictions on overseas travellers.
Its 4.875 per cent US dollar bond due in 2026 dropped to 99.6 cents on the dollar on August 12 versus a high of 102.4 on July 6, according to Bloomberg data. The slide has driven its yield to 4.95 per cent from 4.40 per cent in that period, signalling risk aversion among traders.