Malaysia Airlines stocks on rollercoaster ride

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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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. 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...

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.



Support ASEAN news

Investvine has been a consistent voice in ASEAN news for more than a decade. From breaking news to exclusive interviews with key ASEAN leaders, we have brought you factual and engaging reports – the stories that matter, free of charge.

Like many news organisations, we are striving to survive in an age of reduced advertising and biased journalism. Our mission is to rise above today’s challenges and chart tomorrow’s world with clear, dependable reporting.

Support us now with a donation of your choosing. Your contribution will help us shine a light on important ASEAN stories, reach more people and lift the manifold voices of this dynamic, influential region.

$
Personal Info

Donation Total: $10.00

 

 

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