JAL shares tumble 45 per cent
13 Jan 2010
Hong Kong: Crisis-hit Japan Airlines (JAL) failed to subdue sentiment in Tokyo with the Nikkei regaining ground on Thuesday after being engulfed by a wave of selling orders influenced by negative sentiment engulfing JAL. Shares in JAL, Asia's biggest airline, plunged almost 45 per cent as bankruptcy and possible delisting loom under a court-ordered restructuring.
According to market analysts, since delisting appeared to be near certain there was no reason why selling would stop. JAL shares hit the daily limit of 30 yen, to plunge 37 yen.
Upbeat market sentiment, however, was not affected by JAL's troubles. Despite the JAL-induced selling, Tokyo's Nikkei-225 closed up 0.75 per cent, or 80.82 points, to 10,879.14, which is its highest closing since October 2008.
The Japanese economy emerged from recession in the second quarter of this year after four consecutive quarters of deep contraction.
Market players were also influenced by the decision of American Airlines and its partners to increase their investment offer for JAL to $1.4 billion. The latest offer was up from the previously offered $1.1 billion. American is locked in a bidding war with rival Delta Air Lines for JAL.
Both airlines are seeking to enlarge their footprint in the Asian market through a tie-up with the Japanese carrier, which is also Asia's largest airline.
