The Aviation sector shares have been in the doldrums ever since the market crash of May 2006. With teh crud oil prices touching a high of 80$ per barrel,there was no respite for the aviation story!! Jet Airways crashed below its all time low after the sahara deal fall out. But why is it shooting up by 10% for the last two trading sessions!!
There are two major factors which an investor needs to consider here :
1. The crude oil prices have crashed below 69$ per barrel
2. Jet is planning to acquire 30% stake in Sahara for an all cash deal at original negotiated prices
Though the business model of Jet looks attractive, its better to avoid this counter for the long term considering the highly competitive space in which Jet operates. Low cost carriers are giving it a run for it's market share and to add on Indigo is coming out with an IPO next year. Mallya can spring out a lot of surprises and has a bag full of tricks up his sleeve!!
Wait and Watch is the policy to be followed for this sector
About Me
- dharma
- I believe in "Baptism by fire" that will transform me from an average joe to a true blue bee's knees in corporate finance and investment banking
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