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The international financial company ING Financial Market has significantly upgraded its outlook on the Asian aviation industry, predicting Monday the outbreak of war in the Gulf will not affect the market.
In its report, the ING expects that in the next six months, Asian airline stocks will perform well and the airline equity prices will continue to rise.
The ING forecasts the current high level of jet fuel prices determined by the cost of crude oil is unrealistic, and crude oil prices will rapidly correct once the war in the Gulf cease, in turn substantially reducing jet fuel costs.
Furthermore, the IGN expects crude oil prices will not experience a sharp rise while the war starts, and the oil prices will fall to an average of 19 US dollars per barrel by the fourth quarter of 2003, compared to the current oil price at around US$30 per barrel.
"A swift war in the Gulf will take away what we see as a five to seven US dollars per barrel premium that is currently built into the crude oil price," said Philip Wickham, the aviation analyst at ING Financial Markets.
"It is the time now for investors to start upgrading their holdings in Asian aviation stocks to take advantage of the upswing when it comes, " he said.
(Xihua New Agency February 17, 2003)
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