Malaysia Airline System (MAS) fell in early trade on Bursa Malaysia today as the market digested the latest news of the tragedy that struck the company.
The crash of flight MH17 enroute from Amsterdam to Kuala Lumpur, reportedly shot down in eastern Ukraine dragged the company’s shares as it is still recovering from the loss of flight MH370.
At 11 a.m today, MAS shares were the top volume traded counter on Bursa Malaysia with its price falling to 18.5 sen or by 20.5% before recovering to 20.5 sen.
MAS which suffered losses for the last 3 financial years is facing immense pressure to improve its financial performance. Its 69% shareholder, state owned sovereign fund, Khazanah Nasional, had announced recently that it was looking at restructuring the company within a year.
This latest incident is a major setback to the company and will make a revival of its fortunes more difficult.
The fact that Khazanah is the major shareholder and has the financial firepower to undertake a massive overhaul of the company does not compensate for the loss of investor confidence in the company.
“The very fact that the government has taken a position that it will not allow MAS to fail has provided some assurance and some kind of floor to its price,” said Pong Teng Siew , the Head of Research of Inter Pacific Securities Sdn Bhd..
MAS currently has a cash burn rate of RM5 million per day according to a report by Maybank IB which was released on June 23.
This could exert pressure on its cash reserves but by the end of 2015 this could increase as much as 5 times and the one year time line set by Khazanah for restructuring could be too late.
Maybank reckons that MAS has to carry out an equity injection by mid 2015.
MAS recorded a net loss of RM935 million for FY2013 and Maybank estimates its losses to balloon to RM1.2 billion for FY14.
In 2013, MAS successfully drove up the daily utilization hour of narrow-body planes from 9 to 11 hours.
The persistent high oil prices also acts against the company. According to Maybank, MAS would consume 15.8m barrels of jet fuel in 2014.. A US$ 1 per barrel increase in jet fuel prices on a full-year accounted basis would add RM51.4 million to costs.
At this juncture , it very well seems that the government assurance of not allowing to fail is the only thing going for MAS and preventing a complete free fall of its share price.
However, it remains to be seen , what the floor of its shares would be. Maybank has a price target of 12.5 sen on MAS with a ‘Sell” recommendation.
Ranjit Singh
Fri Jul 18 2014
The crash of flight MH17 enroute from Amsterdam to Kuala Lumpur, reportedly shot down in eastern Ukraine dragged the companys shares as it is still recovering from the loss of flight MH370.
AS veto, halang PBB iktiraf negara Palestin
AS berkata sebuah negara Palestin yang merdeka harus ditubuhkan melalui rundingan terus antara Israel dan Pihak Berkuasa Palestin.
Pendigitalan penjagaan kesihatan, pembaharuan pembiayaan jadi keutamaan KKM - Dzulkefly
Pendigitalan penjagaan kesihatan, bersama-sama dengan pembaharuan pembiayaan kekal menjadi keutamaan Kementerian Kesihatan (KKM).
[LAPOR LANGSUNG] Peserta Gaza Freedom Flotilla dari Malaysia tiba di Istanbul
Kesemua mereka dijadual menetap di Istanbul selama dua hari bagi menyertai non-violence training dikendalikan FFC.
Orang ramai perlu berani lapor kes dera - Nancy
Perkara itu boleh dilaporkan secara terus melalui Talian Kasih 15999 yang dikendalikan oleh Kementerian Pembangunan Wanita, Keluarga dan Masyarakat (KPWKM).
Hamilton optimis kedudukan lebih baik di GP China
Lewis Hamilton melihat potensi kedudukan yang lebih baik dalam saingan Grand Prix yang kembali ke China buat pertama kali dalam tempoh lima tahun, hujung minggu ini.
Peserta industri Labuan IBFC rayu MOF benarkan aktiviti perdagangan
Peserta industri IBFC Labuan mengemukakan rayuan kepada Kementerian Kewangan bagi pertimbangan supaya membenarkan kegiatan perdagangan dalam lingkungan pusat itu.
NSC2024 fokus kesiapsiagaan negara hadapi IR 4.0
NSC 2024 memberi penekanan kepada elemen daya cipta dan kesiapsiagaan negara dalam menghadapi kerancakan Revolusi Industri 4.0 (IR 4.0).
CAP gesa perkukuh Perjanjian Global Plastik, elak krisis pencemaran sisa
CAP minta rundingan Perjanjian Plastik Global perkukuh kandungan dalam perjanjian ini bagi mengelakkan krisis pencemaran sisa plastik terus berlaku.
Program perintis AI Sandbox sasar 900 pemula niaga,13,000 bakat baharu AI menjelang 2026
Inisiatif ini adalah untuk mendorong Malaysia ke arah masa depan yang dipacu oleh inovasi, produktiviti dan daya saing.
Pencemaran udara dapat ditangani dengan penglibatan Datuk Bandar, pemimpin masyarakat - WHO
Datuk Bandar bukan hanya berperanan memantau sesebuah wilayah, tetapi juga harus membudayakan setiap polisi yang diperkenalkan khususnya mengenai pencemaran udara.
Pesawat MH17 ditembak jatuh peluru berpandu buatan Rusia - Mahkamah Belanda
Mahkamah Belanda memutuskan pesawat Malaysia Airlines MH17 ditembak jatuh pada 2014 oleh peluru berpandu buatan Rusia.
Berita antarabangsa pilihan sepanjang hari ini
Antara pelbagai berita luar negara yang disiarkan di Astro AWANI, berikut adalah antara yang paling menjadi tumpuan sepanjang hari ini.
COVID-19: Penunjuk perasaan bantah langkah sekatan kerajaan Belanda
Pihak berkuasa tempatan melarang perhimpunan berkenaan dan mempunyai petunjuk bahawa penunjuk perasaan merancang keganasan.
Banjir di Belanda, rakyat Malaysia selamat - Kedutaan
Semua rakyat Malaysia yang berada di bandar Maastricht dan Valkenburg, Belanda yang dilanda banjir, dilaporkan selamat, kata Kedutaan Malaysia di The Hague.
Negara anggota JIT memperingati ulang tahun ke-7 nahas MH17
Pasukan penyiasat bersama (JIT) MH17 merangkumi lima negara umum kekal komited mencari keadilan dan membawa ke muka pengadilan.
Wartawan jenayah Belanda cedera parah ditembak
Peter R De Vries ditembak selepas membuat kemunculan dalam sebuah rancangan bual bicara di televisyen.
Euro 2020: Lapan negara sah benarkan penonton
Venue di Amsterdam, Baku, Bucharest, Budapest, Copenhagen, Glasgow, London dan St Petersburg akan membenarkan kemasukan penonton dengan tahap kapasiti yang berbeza.
Suspek serangan kereta api Paris dijatuhi hukuman penjara seumur hidup
Tertuduh, Ayoub El Khazzani, 31 tahun, yang berasal dari Maghribi, dipenjara seumur hidup dengan jaminan 22 tahun.
MH17: Suspek nafi terlibat insiden tembak jatuh pesawat Malaysia Airlines
Salah seorang suspek yang didakwa dalam perbicaraan kes tembak jatuh pesawat Malaysia Airlines MH17 menafikan penglibatannya.
Klopp puji prestasi Fabinho lawan Ajax
Fabinho memulakan perlawanan itu sebagai gandingan Joe Gomez di posisi pertahanan tengah dan membantu Liverpool memulakan kempen UCL musim ini dengan kemenangan 1-0 di Amsterdam.