China Eastern takes plunge to 6-month low when China widens yuan band
2012 04 19
- Details
NEW YORK listed China Eastern Airlines sank to six-month low in US trading after China's central bank doubled the daily trading band to one per cent on April 14, Bloomberg reported.
Shares of China Southern Airlines, the nation's largest carrier, also dropped upon the news. American depositary receipts of China Eastern plunged 3.6 per cent to US$15 earlier this week, the lowest close since Oct 7, 2011 while Hong Kong shares dropped 4.9 per cent to US$0.30.
"Chinese airlines may be impacted by the currency policy change should the yuan react with depreciation," said Alex Ashby, a New York analyst at Global X Funds. Both China Eastern and China Southern forecast falls of over 50 per cent in net income in the first quarter 2012 due to smaller foreign-exchange gains, higher fuel prices and weaker economic growth.
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