SHARES of the Philippines’ largest budget carrier gained by a record 50% at the open Wednesday to partially recover losses triggered by a local broker’s trading error the day before.
Cebu Air, Inc. climbed to P87, rebounding from a record slump on Tuesday. The company’s shares plummeted 38% to P58 in the last few minutes of trading yesterday, triggered by a misplaced order during the Philippine Stock Exchange’s no-cancel period. The stock had closed at P93.4 on Monday.
“It was a trader error,” a representative at Quality Investment & Securities Corp., which executed the trade, said by phone. “Our brokerage wasn’t meaning to sell Cebu Air shares.”
Cebu Air CEO Lance Gokongwei said Tuesday in a text message that the share price drop was likely a fat-finger trade and the price would recover Wednesday. A spokesperson for the Philippine Stock Exchange declined to comment.
According to Regina Capital Development Corp. analyst Rens Cruz, the fat-finger error opened up an opportunity for some investors to reenter the market at a reduced price. “There is also a lot of incentive to bring prices back up in the next few days” since the trading error trapped other shareholders in the P90 range, he said.
Cebu Air, which last month ordered 31 Airbus SE aircraft worth $6.8 billion to meet its goal to have an all-new fleet in five years, will likely nearly double its profit this year, according to analyst estimates compiled by Bloomberg. — Bloomberg