(Bloomberg) -- 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 87 pesos, rebounding from a record slump on Tuesday. The company's shares plummeted 38% to 58 pesos 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 93.4 pesos 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.”
Read more: Explainer on fat finger trades
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 90-peso 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.
--With assistance from Cecilia Yap, Clarissa Batino and Ian Sayson.
To contact the reporter on this story: Claire Jiao in Manila at cjiao5@bloomberg.net
To contact the editors responsible for this story: Cecilia Yap at cyap19@bloomberg.net, Divya Balji, Teo Chian Wei
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