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Webjet Group (ASX:WJL) was up over 10% in early lunchtime trades on Thursday at 75.5cps, pushing the online travel retail up to top gainer status, at least intraday.
But with no news out from Webjet Group today – this is the core business, Webjet Group, and not the recently spun out Webjet Travel Group, which is now under the ticker WEB but doesn’t actually relate to plane ticket sales, which, yes, is quite confusing – one is left to wonder why the +10% surge is taking place.
Especially because Perpetual Limited actually limited its stake in the company earlier this week (though, still retains a voting power over 5%.)
That could likely form part of the calculus here: someone, somewhere, is swooping in on a travel business that appears sound, given recent strength in Australian visitor numbers.
(This finance journalist finds himself in the embarrassing position of not being too sure if a broker’s note has been sent out today, but, he’s cautiously bullish that isn’t the case.)
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 took a big hit when it said changing tastes for travel – read: a disinclination from Australians to bother visiting the USA at all right now – could whack it by up to A$100M.
But this Ameri-centric theory is complicated: Webjet Group is actually up +60% in the last month. In late March, Directors were buying shares, which is generally something investors like to see (even if those who are perhaps fatally cynical might roll their eyes.)
Still, Webjet was already on something of a tear before Flight Centre (down -40% YTD) started waving a flag of woe. So we’re not really seeing in Webjet Group’s price action a bounceback from some early week panic selling.
Then again, all of this wondering could be missing the larger point: it’s simply one of the cheaper-but-fairly-safe-bets you can make on the ASX when it comes to global travel, and it hasn’t come out with any news on America.
If the company keeps this up, they’ll get back to 80c – where they were when Webjet Group separated from its (non-plane) travel division last year.
WJL last traded at 75cps.
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