In "The Big Banks," Citigroup: Swire Properties discounted by 9.6% to reduce its stake in Cathay Pacific is expected to be a stock adjustment

Citi published a research report indicating that Swire Pacific (00019.HK) announced before the market opened today (13th) the placement of 153 million shares of Cathay Pacific (00293.HK) at a price of HKD 11.74 per share, representing a discount of 9.6% to yesterday's closing price. After the sale is completed, Swire Pacific will hold 2.797 billion shares of Cathay Pacific, accounting for approximately 45.12% of the issued share capital. Swire Pacific will net HKD 1.789 billion from this placement and record a gain of HKD 365 million from the sale. The placement is expected to be completed no later than the 17th of this month.

The bank believes the placement price is equivalent to 1.2 times the forecasted price-to-book ratio for the calendar year 2027, or 6.7 times the forecasted price-to-earnings ratio for the calendar year 2027. Although the market may interpret this negatively, this sale is likely aimed at adjusting Swire Pacific's stake in Cathay Pacific. Previously, before Cathay Pacific repurchased shares from Qatar Airways, its holding ratio was 45%