Malaysia Airlines stocks on rollercoaster ride

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PTJ04_070606_MAHATHIRShares of Malaysia Airline Systems (MAS), Malaysia’s national carrier, spiked on August 19, hitting a high of 0.40 ringgit as news circulated of a possible upcoming privatisation.

On August 18, former Prime Minister Tun Mahathir Mohamad said that privatisation could be the answer to MAS’s financial problems. By noon of the following day, share prices had surged 15.5 per cent.

Although the carrier is listed at the Bursa Malaysia, it is mostly owned by state holdings and has a very small free flow. Penerbangan Malaysia Berhad, a government holding, is the majority shareholder with a 52 per cent stake, and Malaysia’s sovereign wealth fund Khazanah Nasional is the second largest shareholder with 17.33 per cent. Privatisation could mean that Penerbangan gives up its majority stake or Khazanah Nasional retreats. Rumours of these potential developments have been circulating since February 2013.

As reported in The Edge Malaysia, the statements that sent MAS shares soaring where when Mahathir said, “[t]here are people who think that government-linked companies are meant to provide employment opportunities and not to make money for the company or the government. Privatising MAS may change this and the airline can probably make money instead of losses.”

In response to the frenzied speculation that followed, the current Prime Minister’s Office quickly issued a statement claiming that the government has “no intention” of further privatising the airline, and the share price fell back to 0.35 ringgit.

MAS is the flag carrier of Malaysia and operates primarily out of Kuala Lumpur International Airport. The company also has aircraft maintenance repair, and logistical divisions. MAS experienced several sustained periods of unprofitability starting with the Asian financial crisis of 1997. The most recent such period began in 2011 and only started to turn around this year, after the company enacted a series of sharp cost-cutting measures.

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Reading Time: 1 minute

Shares of Malaysia Airline Systems (MAS), Malaysia’s national carrier, spiked on August 19, hitting a high of 0.40 ringgit as news circulated of a possible upcoming privatisation.

Reading Time: 1 minute

PTJ04_070606_MAHATHIRShares of Malaysia Airline Systems (MAS), Malaysia’s national carrier, spiked on August 19, hitting a high of 0.40 ringgit as news circulated of a possible upcoming privatisation.

On August 18, former Prime Minister Tun Mahathir Mohamad said that privatisation could be the answer to MAS’s financial problems. By noon of the following day, share prices had surged 15.5 per cent.

Although the carrier is listed at the Bursa Malaysia, it is mostly owned by state holdings and has a very small free flow. Penerbangan Malaysia Berhad, a government holding, is the majority shareholder with a 52 per cent stake, and Malaysia’s sovereign wealth fund Khazanah Nasional is the second largest shareholder with 17.33 per cent. Privatisation could mean that Penerbangan gives up its majority stake or Khazanah Nasional retreats. Rumours of these potential developments have been circulating since February 2013.

As reported in The Edge Malaysia, the statements that sent MAS shares soaring where when Mahathir said, “[t]here are people who think that government-linked companies are meant to provide employment opportunities and not to make money for the company or the government. Privatising MAS may change this and the airline can probably make money instead of losses.”

In response to the frenzied speculation that followed, the current Prime Minister’s Office quickly issued a statement claiming that the government has “no intention” of further privatising the airline, and the share price fell back to 0.35 ringgit.

MAS is the flag carrier of Malaysia and operates primarily out of Kuala Lumpur International Airport. The company also has aircraft maintenance repair, and logistical divisions. MAS experienced several sustained periods of unprofitability starting with the Asian financial crisis of 1997. The most recent such period began in 2011 and only started to turn around this year, after the company enacted a series of sharp cost-cutting measures.

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