JAL makes modest market return
LESS THAN three years after it collapsed into bankruptcy, Japan Airlines Co Ltd (JAL) made a modest market return yesterday, with its shares closing 1 per cent above the price set for the world’s second-biggest IPO of the year.
The $8.5 billion initial public offering had been priced conservatively to take account of the airline industry’s tough outlook, with full-service carriers such as JAL under threat from low-cost operators in an already weak economy.
JAL’s stock opened around 3 per cent above the IPO price of 3,790 yen, but soon levelled off to close 1.1 per cent higher at 3,830 yen – ranking it alongside Air China Ltd as Asia’s second-biggest airline by market value behind Singapore Airlines Ltd.
Trading volume topped 40 million shares, worth around $2 billion. Traders had suggested JAL, which emerged from bankruptcy with the highest level of operating profits in the industry, might climb as much as 10 per cent on its market return given trading indications on the unofficial grey market.
CLSA Asia-Pacific Markets initiated coverage with a “buy” rating on the stock, while Macquarie Capital Securities rated it ‘outperform’. – (Reuters)