Hot Stock MAS regains 5% after major sell-down

by **Cals** Thu 06 Jun 2013, 12:52

Hot Stock MAS regains 5% after major sell-down
Business & Markets 2013
Written by Kamarul Anwar of theedgemalaysia.com
Thursday, 06 June 2013 11:53

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KUALA LUMPUR (June 6): Malaysian Airline System Bhd (MAS) was the most sought-after counters this morning after a major sell-down yesterday.

At 11:38 am, the national carrier shares were up by one sen or 4.62% to 34 sen. The counter saw 151.68 million shares changed hands after it had been traded as high as 34.5 sen earlier.

An analyst who tracks MAS stock said yesterday’s major sell-down of MAS shares was “overdone” in terms of total traded volume. However, the analyst also noted that investors received a good deal by trading their MAS renounceable rights shares yesterday.

“Investors think the pricing was fair (for the sell-down),” said the analyst who spoke on the condition of anonymity.

In today’s The Edge Financial Daily article on MAS, RHB Research analyst Jerry Lee said investors would want to lock in their profits from their subscription of MAS rights issue shares.

“Since the rights shares were issued at 23 sen each, they would be in the money and therefore sell,” said Lee as quoted by The Edge Financial Daily.

Earlier this year, MAS issued a total of 13.37 billion rights shares on the basis of four rights shares for one existing share, effectively increasing the airline’s share base by 400%.

The analyst said that MAS operations are improving, when asked about the group’s fundamentals.

“You can’t judge an airline’s operations by its first quarter performance. Generally, the first quarter is the weakest for airlines,” said the analyst.

“It also finally recorded a positive cash flow in its first quarter. This is a milestone for MAS.”

In the three months ended March 31, 2013 (1QFY13), MAS made a net loss of RM278.83 million, which was 62.3% higher year-on-year. However, it collected bigger revenue of RM3.55 billion, up from the previous year’s RM3.11 billion.

MAS blamed the widened year-on-year net loss on higher finance costs and an unrealised foreign exchange loss.