Cathay Pacific Airways continued to see its share price fall yesterday, marking its fourth loss in five days. The stock ended at $12.55, down 35 cents, or 2.71 per cent, from Thursday. Since the start of the week it has the stock has lost 8.39 per cent of its value. The nosedive comes after Cathay said in an internal newsletter early in the week that it expected lower revenue figures for the first six months of the year. Cathay's share price has also suffered recently from speculation that the carrier is set to lose out to rival Dragon Airlines on mainland routes after the handover of the territory next year. Dragonair is majority-owned by the Beijing-backed Chinese National Aviation Corp. Analysts following Cathay stock said the share price would find support at about the $12 level, at least until interim results were released next month. 'At that level the stock will trade at a price-earning ratio of under 10 times,' one analyst said. The results to be released next month will determine the stock's health through to the end of the year. Analysts said that the appreciation of the US dollar and increases in the price of oil were seen to have eaten into the airline's profit margins. However, the firm's balance sheet will benefit from the exceptional gain arising from the disposal of most of Cathay's stake in Dragonair. At the same time, the strong performance of Dragonair, in which Cathay still has maintains a stake, will continue to boost earnings.
