Why the Sydney Airport share price has beaten the ASX 200 in the last 4 months

Takeover offers and soaring vaccination rates appear to have spurred investor interest
The post Why the Sydney Airport share price has beaten the ASX 200 in the last 4 months appeared first on The Motley Fool Australia. –

The Sydney Airport (ASX: SYD) share price is shaking off the wider market selling pressure today.

At the time of writing, Sydney Airport shares are up 0.73% in afternoon trade, at $8.26 per share. The S&P/ASX 200 Index (ASX: XJO), on the other hand, is in the red, down 0.33%.

And that trend is nothing new.

In fact, over the past 4 months, the Sydney Airport share price has trounced the returns from the benchmark index.

Here’s why.

What’s been boosting the the Sydney Airport share price?

On 2 July, 4 months ago today, the airport’s shares opened at $5.81. At the current Sydney Airport share price of $8.24, that represents a gain of 42%. Very tidy!

Over that same period, the ASX 200 is up a slender 0.2%. While that is in positive territory, the ASX 200 has come under pressure from some of its bigger constituents since the start of July. Most notably the big miners, which have seen their shares falling amid sinking iron ore prices.

The Sydney Airport share price, on the flip side, has enjoyed a few healthy tailwinds.

Foremost among those is the series of takeover offers the airport has received, commencing on 5 July. On that day the company announced a consortium of infrastructure investors from IFM Investors, Global Infrastructure Management, and QSuper had offered a $22.6 billion all-cash transaction to acquire its assets.

The offer worked out to roughly $8.25 per share at a time when Sydney Airport’s shares were trading for a lowly $5.81.

As you might expect, news of the offer saw the Sydney Airport share price soar more than 37% in intraday trading.

The airport’s management rejected the offer though, saying it was still below its pre-pandemic highs of $8.86 per share.

Since then, other takeover offers have been floated, helping support the share price.

The other clear factor supporting all ASX travel shares in recent months has been the rapid rollout of the COVID-19 vaccine across Australia.

With double vaccination rates now close to 80%, international travel (with restrictions) is back on the menu for Aussies over the upcoming holidays. And there should be plenty of pent-up demand both for incoming and outbound air travel.

How has Sydney Airport performed longer-term?

Over the past 12 months, the Sydney Airport share price has gained 45%. That, again, beats the 24% returns posted by the ASX 200 in that same time.

So far in 2021, Sydney Airport shares are up 29%.

The post Why the Sydney Airport share price has beaten the ASX 200 in the last 4 months appeared first on The Motley Fool Australia.

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More reading

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The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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