Air China Ltd. has fallen the most since December 2008, leading declines for airlines. It’s been said that institutional investors are selling the shares for profit amid concern that tightening measures could slow growth economically.
Air China decreased 7.5 percent to 12.78 yuan at 11:01 am Local time in Shanghai trading. Before today, shares had rallied 42 percent this year. China Eastern Airlines Corp. decreased by 4.8 percent to 9.22 yuan.
“Some institutional investors are selling for lack of confidence in economy,” said Li Lei, an analyst at Beijing’s China Securities Co.
“The government is announcing tightening policies like the ones on property. That will slow down the economic growth and hurt investors’ sentiment," Li Lei stated.
"Airlines account for quite a big proportion of institutional investors’ portfolios and they have made quite a lot of profit. Some investors decided it’s time to sell.”
Source: Business Week