A domestic travel boom is keeping the Sydney Airport Holdings Pty Ltd (ASX: SYD) share price continues to cruise near record highs following the release of its latest monthly traffic results.
Shares in our largest airport operator dipped 0.2% to $9.00 in early trade when the S&P/ASX 200 (Index:^AXJO) (ASX:XJO) index tumbled 0.8% as investors moved to lock in some profit as our share market closes in on record highs set in 2007.
Nervousness about the fragility of a US-China trade deal and the effectiveness of loose global monetary policy give investors a reason to be cautious. This is the environment that's perfect for infrastructure stocks, including the Transurban Group (ASX: TCL) share price and APA Group (ASX: APA) share price.
Domestic travellers outpacing international
As long as there isn't anything on the operational front to scare the market, these stocks are likely to hold their vantage point, and Sydney Airport's October traffic numbers seem to fit that bill – although it isn't without some worrying signs.
The good news first! The standout was the growth in domestic travellers with the number of these passengers increasing 2.3% in October 2019 to 2,541 compared to this time last year. Last month's figure is also an increase over September when 2,286 domestic travellers moved through the airport.
Growth in international travellers was more anaemic at 0.3% over October 2018 as the all-important Chinese visitor segment falling by 3.3% over the previous corresponding period (pcp). The slowing Chinese economy and turmoil in Hong Kong are likely contributing factors to the slump.
If you thought US tourists were capitalising on the weak Australian dollar to take a holiday Down Under, think again (at least for October). US travellers fell 3.6% pcp although year-to-date growth is still at a healthy 9.1%.
Other Asian arrivals offsetting Chinese weakness
What was keeping international traffic growth in the positive (on a pcp basis) was visitations from other Asian countries. Traveller numbers from the Philippines jumped 11.8%, Indonesia increased 9.8% and India improved 7.1%.
"The highlight for October was domestic traffic, with more than 2.5 million people passing through our domestic terminals and 2.3 percent growth on October 2018," said Sydney Airport chief executive Geoff Culbert.
"From an international perspective, growth from the USA, India and Indonesia continues to be the highlight for 2019."
Infrastructure stocks are hot property
The Sydney Airport share price is one of the better performing stocks among its peers. Its shares gained 36% over the past year, while toll road operator Transurban is close behind with a 33% increase and pipeline operator APA Group is sitting at 26%.
In contrast, the ASX 200 index is up 19% over the period.
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