Why is Cathay Pacific Airways stock down today?
Cathay Pacific Airways' stock experienced a decline of 1.9% to HK$13.78 on Wednesday, following the announcement by conglomerate Swire Pacific to sell a significant portion of its stake in the Hong Kong carrier. Swire Pacific will trade 362.65 million Cathay Pacific shares at 13.20 Hong Kong dollars each, which represents a 7.7% discount to the company's closing price on Tuesday.
This move will reduce Swire's stake in Cathay to 39.15%. The broader market context further exacerbated the pressure on Cathay Pacific. Recent tensions between the United States and Iran led to a sharp increase in crude oil prices, with Brent crude breaching the $95 mark and WTI surpassing $91, directly threatening the airline's operating margins.
Additionally, the Hang Seng Index fell by approximately 0.8%, marking its third consecutive day of decline, as geopolitical risks and rising Treasury yields dampened risk appetite among Hong Kong equities.
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