Hot Stock AirAsia X falls 4% on news of financial woes

by **Cals** Wed 19 Nov 2014, 02:25

Hot Stock
AirAsia X falls 4% on news of financial woes

KUALA LUMPUR (Nov 18): AirAsia X Bhd ([You must be registered and logged in to see this image.] Financial Dashboard) fell as much as 4% among most actively traded stocks as investors reacted to a report by The Edge Financial Daily on the airline’s financial constraints.
The Edge Financial Daily, quoting sources, reported today that long-haul low-cost carrier faced difficulties in paying staff wages. Describing the unprecedented payment issue as a “temporary setback”, the management of AirAsia X blamed the payment delay to the “late arrival of incoming funds”.
It was also reported that Tan Sri Tony Fernandes, AirAsia co-founder and group chief executive officer, was planning to play a more active role in AirAsia X.
AirAsia X fell as much as three sen to 71.5 sen before reducing losses. The stock was traded at 72 sen at 11.03am.
AirAsia X was the fifth most active stock on Bursa Malaysia. For comparison, the FBM KLCI added 3.01 points or 0.2%.
A remisier said the selldown of AirAsia X shares was “inevitable” and that negative sentiment would prevail for the rest of today.
The remisier said the airline's loss has been in the spotlight. AirAsia X's net loss widened to RM128.79 million in the second quarter ended June 30, 2014 (2QFY14) from a net loss of RM32.3 million a year earlier.
AirAsia X is due to announce its 3QFY14 financials this week.

“The company has been making losses for the last few quarters. When you have news that AirAsia X is having some kind of financial difficulties, investors will react to it and the selldown is inevitable.
“AirAsia can sell the story of a turnaround for the third quarter and the fact that the founder of AirAsia group is coming back into management. But, what is obvious is that investors are not really buying it and that is why you see the share price falling this morning,” he said