Webjet Group (ASX:WJL)
rose more than 10% during early afternoon trading on Thursday, reaching 75.5 cps, which propelled it to the top gainers list for the day, albeit temporarily.
However, as there has been no update from Webjet Group so far—this refers specifically to the main entity, Webjet Limited, rather than the newly separated Webjet Travel Group (now listed under ticker symbol WEB), which isn’t connected to airfare transactions—it’s unclear what might be causing the more-than-10% increase. This distinction can indeed get somewhat muddled.
In particular, as Perpetual Limited has recently reduced its holding in the firm earlier this week (although it still maintains more than 5% voting power).
It might well be a factor in this scenario: an entity, at some point, is capitalizing on a seemingly robust travel business, owing to the recent upsurge in the number of visitors to Australia.
(The financial reporter finds themselves in an awkward situation where they're uncertain whether a broker’s note was dispatched today. However, they remain guardedly optimistic that this isn't the scenario.)
It is possible macro is playing a role. Overnight, the US Federal Reserve kept interest rates on pause, which perhaps has sent a reassuring signal to markets that common sense still remains firmly in charge of the #1 global economy, at least as far as the financial system is concerned.
That, in turn, could be informing bullish optimism about travel to America, which has been
suffering
in the face of America’s pivot to strict border controls and what ultimately feels a bit like isolationism.
Earlier this month, Flight Centre faced a significant setback after announcing that shifting preferences in travel—interpreted as Australian disinterest in visiting the USA at present—could cost the company up to AU$100 million.
However, this American-focused theory is complex: Webjet Group has surged over 60% in the past month. Back in late March, board members were purchasing shares, typically an action that appeals to investors (although those inclined towards excessive cynicism might still scoff at it).
Nevertheless, Webjet was performing quite well even before Flight Centre (which has dropped 40% year-to-date) began signaling concerns. Therefore, what we're observing with Webjet Group isn’t really a recovery from an initial week of panicked selling.
Furthermore, all this speculation might miss the bigger picture: it remains a relatively affordable yet reasonably secure option for investing in the ASX amidst international travel trends, without releasing any updates regarding activities in America.
Should the firm continue on this path, they will revert to 80 cents—a level not seen since Webjet Group split from its non-airline travel segment last year.
WJL
last traded at 75cps.
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