By Mohammed Idries
Riyadh-Mubasher: Al-Tayyar Travel Group is diversifying its investments as it carried out five acquisition deals since the beginning of this year, which were financed from the company’s cash resources.
However, the stock shrugged off such expansions, falling 50% since year-start.
Analysts agreed that global financial crises may create good investment opportunities and thus boost companies’ market shares.
Yasser Al-Ahmad, financial analyst at Riyad Capital, told Mubasher that Al-Tayyar has adopted a clear strategy of diversifying its income sources, especially as it operates in a sector impacted by new competitors.
“The stock fall is unjustified, but there may be some concerns in the group we don’t know,” the analyst said.
Ali Al-Jaafari, financial advisor, said the acquisition of companies suffering from financial difficulties or those whose market value decline significantly usually take place during financial crises.
He noted that some major players benefit from the long-term investment opportunities in small companies to boost the market share of such acquired firms.
The acquisition results will not materialise soon as they rely on the efficiency of emerging some services or reducing some costs in the long and medium-term, Al-Jaafari said.
He added that the stock slumped nearly 50% as the company has not announced the financial impact of raising energy tariff.
Translated by Abdul Maguid Aboshahla
