VOI - Voice of Indonesia | RRI - Radio Republik Indonesia

Investors hoping to cash in on a boom in Chinese travel after nearly three years of pandemic lockdowns are shifting into airports, hotels and duty-free operators and away from airlines subject to fluctuating fuel prices and more intense competition.

The first wave of bullishness as China began abandoning its zero-COVID policy in December lifted airline stocks and online travel agencies like Trip.com Group Ltd (9961.HK).

But with global airlines being slow to add capacity to connect China with the U.S. and Europe and Chinese travellers preferring trips closer to home, a new set of stocks is benefiting.

Thailand has re-emerged as a favourite destination for Chinese travellers, and also for investors.

"We were active earlier in terms of domestic travel, lodging space and airports, where we've done quite well," said Elaine Tse, portfolio manager at Allspring Global Investments. Tse said the firm has locked in some profits from those bets.

"We are optimistic on a rebound in regional and international travel and continue to get exposure through airports and airplane leasing."

Shares of airports, such as Airport of Bangkok (AOT.BK) and Shanghai International Airport (600009.SS) have underperformed the big three Chinese airlines Air China (601111.SS), China Eastern (600115.SS) and China Southern (600029.SS) since the start of November, leaving room for further gains in the former.

Investors say airline stocks are not only expensive, but their earnings tend to be volatile and susceptible to swings in oil prices.

Shares of Air China, China Eastern and China Southern have gained between 7% to 17% in the past four months, with Air China and China Southern trading above their 5-year average forward earnings, according to Refinitiv data.

In contrast, China Tourism Group Duty Free Corp (601888.SS) trades at 28 times its forward earnings, well below a 5-year average.

In the battle for Chinese travelers, local airlines are expected to fare better than regional airlines such as Qantas (QAN.AX), Singapore Airlines (SIAL.SI) and Cathay Pacific (0293.HK), mainly because Chinese airlines kept more widebody planes and staff ready.

China expects inbound and outbound tourist numbers in 2023 to reach more than 90 million, recovering to 31.5% of pre-pandemic levels. All three Chinese airlines are expected to swing to profit in 2023 after reporting big losses last year, according to Refinitiv data.

Analysts expect Chinese airlines will see profits peak next year as international traffic makes a fuller rebound.

"I think we need to be patient and wait for the earnings to kick in to drive the valuations down," said Vey-Sern Ling, senior equity advisor at Union Bancaire Privee.

Hilde Jenssen, head of fundamental equities at Nordea Asset Management, has bought some consumer discretionary companies exposed to tourism such as duty-free operators in hopes of capturing secondary effects of the reopening.

While investors were betting at the start of the year that sky-high Chinese household savings, which jumped to 17.8 trillion yuan ($2.61 trillion) last year, will lead to a post-pandemic splurge, Chinese consumers have so far been cautious.

Jenssen said earnings from some consumer discretionary companies showed they were restocking inventories in anticipation of strong demand.

"It might not be sort of the big bang that everybody was hoping for at the beginning of the year ... (but) there is definitely some pent up demand." (Reuters)

China's military said on Thursday it had monitored and driven away a U.S. destroyer that illegally entered waters around the Paracel Islands in the South China Sea.

In a statement, the military said that the guided-missile destroyer USS Milius intruded into China's territorial waters, undermining peace and stability in the busy waterway.

"The theater forces will maintain a high state of alert at all times and take all necessary measures to resolutely safeguard national sovereignty and security and peace and stability in the South China Sea," said Tian Junli, a spokesman for China's Southern Theatre Command.

The U.S. Navy on Thursday disputed the Chinese military statement, saying the destroyer is conducting "routine operations" in the South China Sea and was not expelled.

"The United States will continue to fly, sail, and operate wherever international law allows," a statement from the U.S. Navy 7th Fleet said.

Tension between the United States and China has been growing in the area.

The United States has been shoring up alliances in the Asia-Pacific seeking to counter China's assertiveness in the South China Sea and the Taiwan Strait, as Beijing seeks to advance its territorial claims. (Reuters)

A majority of Australians support giving more recognition to its Indigenous people in the constitution through a 'Voice to Parliament', but there is a big minority, including many First Nations people, who oppose the plan.

Prime Minister Anthony Albanese on Thursday announced the question the government wants to put to a vote in a referendum later this year to give Indigenous people a representative body in parliament, seeking to heal wrongs done to them over centuries.

The First Nations have inhabited the land for 60,000 years but are not mentioned in the 122-year-old constitution. Any constitutional alterations require a national referendum.

Those opposed to the Voice say having a consultative committee in parliament will not improve conditions for the Indigenous people.

"The only thing that really works is treating people equal in the society...," said Warren Mundine, an Aboriginal politician running the 'Recognise a Better Way' campaign that's asking people to vote 'No' in the referendum.

"The Voice is not going to fix one iota of the problems that we have in indigenous affairs," he added.

Indigenous people track well below national averages on most socio-economic measures. Their life expectancy is about 8 years lower than the national average.

Suicide rates are twice as high, and their health outcomes are dismal with high levels of child mortality and disease. Aboriginal and Torres Strait Islander people are massively over-represented in prisons, deaths in custody, and children sent to out of home care.

The conservative opposition Liberal Party has not said which way it would vote, while the rural-based National Party, the junior partner in the opposition coalition, has said it would oppose the Voice.

Supporters of the Voice campaign argue having a representative body in parliament is about fairness and making sure the community is heard on matters affecting them.

It would also bring Australia to par with other countries with First Nations population like neighbouring New Zealand and Canada which have done better at ensuring their rights.

"It would be a terrible reflection on Australia if we lose this referendum," said Thomas Mayo, a Torres Strait Islander and a member of the referendum working group.

"I mean how backward are we? The only country without a treaty with indigenous people, the only country without constitutional recognition of Indigenous people. It'll set us back in our setting in the world," he said. (Reuters)

China and the Philippines should manage their differences properly, the Chinese foreign ministry said on Thursday, after the first in-person meeting between senior diplomats from the countries since before the COVID-19 pandemic.

Bilateral tensions have risen recently over naval disputes in contested areas of the South China Sea and the increasing U.S. military presence in the Philippines.

"Both sides reaffirmed the importance of properly managing differences through friendly consultations, as well as maintaining the general direction of Sino-Philippine friendship," Beijing's ministry said in a statement.

It came after Chinese Vice Foreign Minister began a three-day visit to Manila by meeting with Philippines counterpart Theresa Lazaro.

The talks also touched on aspects where both sides could work more closely, it said, yielding an agreement to deepen cooperation in agriculture, infrastructure, energy and culture.

Lazaro said in a statement that almost four years had passed since the last high-level diplomatic consultations between Beijing and Manila and that they should be held more often.

The Philippines earlier this week announced four new military bases under a defence agreement with the United States that would beef up Washington's military presence in the Southeast Asian country.

The bases in question would be located in various areas of the Philippines, including in a province facing the South China Sea. Some leaders of local governments at the sites opposed Manila's decision, worried they would be dragged into a conflict if one arose between the U.S. and China over Taiwan.

China's foreign ministry on Wednesday reiterated a warning to regional countries "vigilant" and avoid being used by the United States. (Reuters)