Hong Kong’s Government Will Bail Cathay Pacific

Cathay Pacific Airways Ltd. is a world-famous carrier from Hong Kong. Last month, the company reported a HK$4.5 billion loss at its airlines, which includes Cathay Dragon, during the January and April period.

Airlines around the world are struggling to deal with the economic impact of the coronavirus pandemic. On Tuesday, the company made an announcement. According to this announcement, it will get a HK$ 39 billion ($5 billion) state-backed bailout. Hong Kong’s government will take a 6% stake in Cathay and can have two observers on the board.

The company would implement another round of executive pay cuts. Moreover, under the deal, Swire’s stake in Cathay will fall from 45% to 42% while Air China’s holding will decline from 30% to 28%.

It is worth noting that shares in Cathay Pacific, as well as major shareholders Swire Pacific and Air China, halted trading on Tuesday ahead of the announcement.

Hong Kong’s Hang Seng index on June 9

Stocks in the Asia Pacific were mostly higher on Tuesday thanks to investor sentiment. It makes sense as investor sentiment continues to remain elevated as governments continue to lift restrictions.

Australia’s S&P/ASX 200 led gains among the region’s markets. On Tuesday, S&P/ASX 200 jumped 2.44% to close at 6,144.90. The financial subindex added 4.84% as shares of the country’s Big Four banks soared on June 9. Shares of Commonwealth Bank of Australia added 5.05% while Westpac gained 5.8%. Moreover, shares of Australia and New Zealand Banking Group rose 6.22% and the National Bank of Australia added 5.08%.

Hong Kong’s Hang Seng index added 1.88% as of its final hour of trading.

Moreover, mainland Chinese stocks saw gains on June 9 The Shanghai Composite added 0.62% to around 2,956.11. At the same time, the Shenzhen Component gained 0.611% to about 11,284.24.

In Japan, the Nikkei 225 fell 0.38% to 23,091.13. At the same time, the Topix index dropped 0.14% to end its trading day at 1,628.43.

South Korea’s Kospi index gained 0.21% to close at 2,188.92