Hedge Funds: Citadel, Marshall Wace Take Aim at Airline Stocks

January 29, 2020 | Hedge Funds, Investments, News
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Carrier stocks are dropping with China cancelations

British Airways announced plans to suspend flights to mainland China this week. The coronavirus continues to deter commercial travel among tourists and business people. We’ve now seen hedge funds take direct aim at the stocks of major airline companies that service the Asian markets.

Citadel and Marshall Wallace have joined their peers in shorting companies exposed to China. Speculators took a special interest in Air France-KLM and Lufthansa. Shares of both stocks are trading about 13% lower since the start of the month. Short float hit 4.55% on Air France KLM, while it hit 3.86% on Lufthansa’s stock n the German market.

Citadel has disclosed a net short position of 1.43% on Air France-KLM.

British Airways and Others Suspend Flights

Lufthansa announced Wednesday that it planned to halt flights to China until February 9. That followed news from British Airways and Cathay Pacific to limit travel to the region. Air France will not flight to Wuhan, the center of the outbreak. However, it has not suspended travel to Beijing or Shanghai yet. The firm may experience the biggest impact given its exposure to the Chinese market and dependence on revenue from the Asian markets.

At the moment, more Chinese citizens have contracted the coronavirus than the number of people who contracted SARs in 2003.

Recent: Bank Director Magazine Conference: Fintech, Cybersecurity and Other Worries for 2020

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