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MooFassa
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Posting #51: Thu Jul 3rd, 2008 08:04 |
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03-07-2008: T Rowe Price exits AirAsia
KUALA LUMPUR: T Rowe Price Associates Inc, a Baltimore-based fund, ceased to be a substantial shareholder of budget airline AirAsia Bhd as at June 26, after it disposed of its shareholdings via the open market, according to a Bursa Malaysia filing.
As at June 23, T Rowe Price had about 142.8 million shares or 6% equity in AirAsia. There is still no indication as to the buyers of the shares formerly held by T Rowe Price.
Last week, there were large off-market deals involving AirAsia. The transactions sparked rumours that T Rowe Price was exiting the company.
The fund had emerged as a substantial shareholder of AirAsia with a 5.1% block in March 2006 and gradually upped its shareholding to about 8.2% in August last year, after which it started disposing of its shares in the budget liner.
Some of T Rowe Price’s shares could have been picked up by Cayman Island-based Nomad Investment Partnership LP, which emerged as a substantial shareholder in May this year with 118.8 million shares or 5% equity. Since then it has upped its shareholding in AirAsia to 138.4 million shares or 5.8%.
The Employees Provident Fund (EPF) has also been aggressively mopping up AirAsia’s shares and now has about 6.3% equity.
Much of the investor anxiety surrounding budget airlines stems from escalating jet fuel prices. Year-to-date, the Bloomberg Singapore Jet Kerosene Index has gained by 52.2%. This is likely to severely impact margins of low-cost carriers.
Recently, Tassapon Bijleveld, the chief executive of Thai AirAsia, AirAsia’s 49% associate, said that the company would suffer a loss in the first half of the year, with earnings dragged down by rising jet fuel prices. This loss occurred despite passenger numbers rising 23% to 2.1 million from a year earlier.
Despite the challenging environment, AirAsia has posted profits. For the first three months of the year, the company posted a net profit RM161.3 million from revenues of RM535.2 million, an improvement of about 85.6% and 31.8% respectively from a year earlier. However, the strong performance was also attributed to a foreign exchange gain of RM86.2 million.
AirAsia’s stock price has fallen nearly 43% this year. It closed Tuesday’s trade at 93 sen.
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