KUALA LUMPUR: AirAsia Group Bhd and long-haul sister company AirAsia X Bhd rebounded, albeit midlly, on Bursa Malaysia after two days of selldown over Airbus bribery allegations.
AirAsia and AirAsia X gained one sen and 0.5 sen to close at RM1.16 and 12 sen respectively yesterday’s closing, after two days of experiencing intensified selling, as investors reacted to Coronavirus outbreak, amid corporate governance issue.
AirAsia was also among the top 10 most active counters in Bursa Malaysia yesterday.
The upswing came after news that the Employees Provident Fund (EPF) had sold off nearly eight million AirAsia shares before the allegations of kickbacks linked to Airbus aicraft orders had made its round.
The EPF reportedly disposed 7.92 million AirAsia shares at the end of last month, before the corruption allegations emerged.
However, the pension fund still holds a 6.2 per cent stake or 207.34 million (floated shares) in AirAsia, valued at about RM240.51 million as of yesterday, according to Bloomberg Intelligence data.
Some analysts described the sell-off of AirAsia and AirAsia X shares as “temporary turbulence”.
Rakuten Trade Sdn Bhd vice-president of research Vincent Lau said investors were concerned more about the airlines’ flight cancellations and tickets refunds stemmed from the coronavirus epidemic.
“This in turn affects their overall operations, which is further worsened by corporate governance issue,” he told the New Straits Times (NST) yesterday.
He believes the airlines’ operation would “normalise” once demand for air travel returned and the bribery allegations were cleared.
“Crude oil price fell below US$50 per barrel recently and this will help the airlines to offset tepid travel demand dampened by fear of the outbreak,” he said.
OANDA senior market analyst for Asia Pacific Jeffrey Halley said the low-cost carriers were at the front line of a sell-off in the transport sector, caused by the potential economic slowdown from the Wuhan virus outbreak.
“This has been compounded by an increasing number of countries banning flights to and from China and the entry of Chinese citizens,” he told the NST.
Halley said the Airbus-AirAsia corruption allegations had caught investors by surprise.
“This has in effect, twisted the knife in an already delicate situation. Although oil prices have fallen, so has demand. Any cost benefit is more than negated by declining sales,” he said.
Meanwhile, AirAsia X said its board of directors had formed a committee comprising non-executive members, save for Datuk Kamarudin Meranun and Tan Sri Tony Fernandes, to review the bribery allegations.
“The committee’s main objective will be to review the allegations therein so far as it concerns AirAsia X, and to take any necessary action based on the review which includes the appointment of an independent expert,” it said in an exchange filing yesterday.