Monday, July 4, 2011

AirAsia slips after rising to record high

KUALA LUMPUR: Shares of AIRASIA BHD [] fell to a three-day low of RM3.46 in late afternoon trade on Monday, July 4 as traders took profit after closing at a historic high of RM3.63 last Friday.

At 4.33pm, it was down 17 sen to RM3.46 with 8.60 million shares done.

The FBM KLCI dipped into the red after several days of fresh highs. It fell 0.76 of a point to 1,582.18. Turnover was 652.93 million shares valued at RM1.16 billion. There were 290 gainers, 488 losers and 281 stocks unchanged.

Maybank IB Research said its daily, weekly and monthly charts indicate that AirAsia has further upside potential.

AirAsia's price had surged from its June 2008 all-time low of 76.5 sen and has moved up to all-time highs ' denoting its very strong daily, weekly and monthly up-trends and solid buying interest by long-term fund managers.

'We are looking at upward test of its all-time high and resistance level of RM3.67, en-route to its upside target levels of RM3.75, RM4.50 and RM5.50 in the longer-run. Look to accumulate AirAsia on weakness to its support levels of RM3.00 and RM3.63, with stop-loss at RM2.98,' it said.

Maybank IB Research said according to its latest international announcements, its Thailand domestic and international operations are growing strongly.

'Demand from operating new routes like the Chiang Mai hub seems to be very good as well. Indonesian operations seem to have a lot going for it with the launch of Airbus-A320 operations from Bandung while operations in Medan are also exhibiting strong growth,' it said.

The research house going forward, the current demand trends of AirAsia passengers' in the 2Q11 for Malaysia, Thailand and Indonesia operations are positive.

This was evident with increased load factor in April ahead of the previous year for all their three main regional carriers and with average higher revenues for Thailand and Indonesia as well.

Malaysia's forward loads for the remaining months of the 2Q11 were ahead of previous year and that demand is growing ahead of capacity. AirAsia introduced a fuel surcharge in May 2011 which they expect will mitigate some impact of fuel price volatility which will be reflected in 2H2011 and but this will not immediately reflected in 2Q11.

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