Hot Stock MAS shares heavily traded up after possible privatisation report

by **Cals** Fri 18 Apr 2014, 02:27

Hot Stock MAS shares heavily traded up after possible privatisation report

Business & Markets 2014

Written by Ahmad Naqib Idris Adzman Shah of theedgemalaysia.com

Thursday, 17 April 2014 12:12

KUALA LUMPUR (Apr 17): Malaysian Airline System Bhd’s (MAS) shares were heavily traded after a report by Maybank Investment Bank Bhd that the airliner was "ripe for privatisation".

Maybank said that the privatisation of MAS could cost Khazanah Nasional RM1.18 billion, assuming a 10% premium on the current share price.

At 11.52 am today, MAS was traded at 23 sen, up 1.5 sen or 7%, with some 104.5 million shares done. The stock was the second most actively traded stock on the bourse.

Mohsin Aziz, analyst at Maybank Investment, wrote in a report yesterday that the time may be ripe for MAS to be taken private as its share price may have reached its bottom.

“MAS share price is currently trading at its cheapest valuation for the past 12 years.

“We think its share price has reached the bottom and now is an opportune moment to take it private,” he said.

He said MAS’ share price had plunged 16% since the MH370 incident, and is now trading at 0.87 times price-to-book value, consistent with its trough valuation in 2002 and 2008.

Mohsin suggested that the break-up value of all MAS’ profitable business units stood at RM4.15 billion, representing an 18% premium to MAS’ current market capitalisation.

“Should the unprofitable business units manage to successfully turn around in the future, there is more value to be crystallised,” he added.

The research house had upgraded MAS to “hold” from “sell” but had reduced its target price to 22 sen from 27.5 sen.