The Wait Is Over!
Boom and just like that! PAL’s stock soared 41.56% closing at 12.74 Pesos!
After a long-running search to secure a strategic foreign investor for Philippine Airlines (PAL), Japan’s largest airline group All Nippon Airways (ANA) is seeking to buy a 10 percent of PAL’s stake worth more than $90 million.
PAL has been hoping to close an agreement with a potential foreign investor by the first half of 2019. PAL’s last major investor was SMC with an acquired stake of 49-percent in 2012. By 2014, Lucio Tan decided to buy back to 100-percent and gain full control, thus starting the company’s search for a new foreign partner.
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Stock Smarts Qatar — February 5 – 10, 2019
Make Money, Grow Money (Manila) – February 13, 2019
Investing Insights (Dubai) – March 1, 2019
Stock Smarts Manila — March 9, 10, 16, 17 & 23, 2019
Stock Smarts Cebu — April 6 & 7, 2019
Investing Insights Japan – April 13, 2019
Stock Smarts Singapore — May 18 & 19, 2019
Stock Smarts Iloilo – July 6 & 7, 2019
Stock Smarts Cagayan De Oro – July 20 & 21, 2019
Stock Smarts Hong Kong – August 11, 2019
Stock Smarts Taiwan – November 2, 2019
How will the bought stake affect PAL?
A stake in PAL would allow ANA to establish a foothold in faster-growing markets and further boost between Japan and the Philippines, which include opening more international routes serving leisure and business travelers as well as the 10 percent of Filipinos living and working abroad.
This partnership will also help expand PAL’s long-term development in markets and improve their operational efficiency in its goal to achieve a five-star status as a global airline in 2020.
Last February, PAL was upgraded to four star by airline rating company Skytrax due to three improvements introduced over the past years, both in product change and enhancement of the front-line staff service.
What can we expect in the future?
Once PAL attains this five-star status, it will allow the airline to add new destinations in Europe.
The Lucio Tan Group and other tycoons’s Naia Consortium is set to begin in the latter part of 2019 to upgrade and to expand Naia due to a significant growth barrier to PAL and other airlines’ worsening air and passenger congestion in Manila’s Ninoy Aquino International Airport.
By 2021, PAL expects to carry around 21 million passengers compared to 15 million in 2017, when that target was first revealed. Its fleet is expected to grow from 87 planes to 96 aircraft during the same period.
What does the technicals say?
The stock has broken out of its highest resistance. The new support is now at 12. If the stock holds its ground at 12, the possible target price over the mid term can be pegged at 19. This is under the condition that 12 will validate itself as the new support.
