MAS stock calm in face of exit from main index

by **hlk** Sat 11 Jun 2011, 09:50

KUALA LUMPUR: Malaysia Airlines' (MAS) share price barely reacted to the announcement of its exit from FTSE Bursa Malaysia Kuala Lumpur Composite Index (KLCI) yesterday.

The stock closed unchanged at RM1.43 yesterday, with three million shares changing hands.

In a semi-annual review of the FTSE Bursa Malaysia Index Series, its independent advisory committee announced that Malaysia Marine and Heavy Engineering would replace MAS in its line-up come June 20.

According to analysts, the action by the committee was widely expected considering the dismal performance of the stock in the last year, especially in recent months.

The stock has lost about 30 per cent of its value in the last six months.

In early June, HwangDBS reported that MAS had dropped to the 51st position in terms of market capitalisation.

The FTSE Bursa Malaysia Index Series, based on full market capitalisation, generally admits stocks holding a 25th position and above into the index series.

Six research houses have a "hold" call on the stock, while another 12 have a "sell" on it. The counter has an average target price of RM1.47.

It has been a tough year for MAS, with significant losses in its first- quarter results, in what otherwise had been regarded by many as a turnaround year for the airline.

The airline posted a net loss of RM242.3 million for the first quarter ended March 31 2011.

Analysts are now expecting it to turn around only in 2013.