Published: Thursday May 3, 2012 MYT 11:04:00 AM
Updated: Thursday May 3, 2012 MYT 11:14:16 AM
AirAsia rebounds, MAS up in late morning
At 10.59am, AirAsia was up 24 sen to RM3.57. There were 5.72 million shares done at prices ranging from a low of RM3.20 to RM3.65.
MAS rose six sen to RM1.28. There were 5.68 million shares transacted at prices ranging from RM1.22 to RM.34.
On Wednesday, MAS and AirAsia officially announced the reversal of the proposed share swap.
Instead, both airlines inked a supplemental agreement to vary the terms and scope of the original alliance.
MAS, AirAsia and AirAsia X (AAX) would also cease the separation of their respective focus areas, wherein MAS would be focusing on being full-service premium carrier, AirAsia on being regional low-cost carrier (LCC) and AAX on being a medium-to-long haul LCC.
Kenanga Investment Research said overall, the initiatives stated in the supplemental agreement were is tailored in such a way to lower the cost per average seat kilometers (CASK) via joint procurement.
"Nonetheless, we have no imputed for potential cost savings in our forecasts as we are waiting for further clarity. We are maintaining NEUTRAL on the Aviation Sector and reiterate OUTPERFORM on AirAsia (TP: RM4.06)," it said.
As for MAS, Kenanga Research said in terms of its business fundamentals, the collaboration could be positive for MAS, but only in a the longer term as it will take a while to feel the accumulated impact arising from potential cost savings.
"In the meantime, MAS is not travelling along a smooth path in terms of turning around amidst global economic uncertainties and high jet fuel prices, not to mention it also has to finance its RM3.5bil aircraft by FY13," it said.