Malaysia Airline System Berhad

Malaysia Airline System Berhad (MAS), this company name has spread across almost the entire world over the past 9 days and managed to become the most well-known airline in the world.

However, it gets famous not because it has an outstanding service or stellar result, it's just because of MH370 mysteries that make the crowd following the news, as well as condemning the incapabilities of the relevant party in Malaysia. Well, I won't elaborate more the full story here as everyone has knew about it. I want to focus on share market here.

At first suffering from huge loss in the latest quarterly result, follow by MH370 incident. The day after MH370 incident happened, MAS share price dropped 20% and then revert back to only 4% loss. It immediate created an opportunity for speculators to earn easy money.

A friend of mine which is good in short trading and daring. He quickly locked in 2,500 lots at 21 cents, and then he released all of them the next 2 days at 24.5 cents. This incident has let him made gross $8,750 windfall. According to his experience, he said the GLC IA i.e. EPF always like to dump money to save GLC listed companies. He has successfully made similar easy money on GLC counters over the past 6 years. The best margin he had made is on PROTON, which is 5 years ago and about $20,000 in just short period.

For me, I believe what he did is right, the IA sure will salvage the GLCs based on the history. But I did not invest any, due to I'm not a speculator and I'm not fully confident to do so. I also never buy Warranty before.  But what I want to share is that and from the look at it, MAS seems like having a very strong support at 24 cents even with such a bad news. 1 unit of Boeing 777 easily costs $173 millions, even 70-80% of it can be recovered by insurance coverage, MAS still needs to face the 20-30% loss and fork out a lot money to purchase a new plane. Definitely the share price is worse than 24 cents if confirmed the plane is crashed or went missing for a couple of months.

Thus, like what everyone suggested, it's better to sell MAS to whoever capable to run the business. Or like what Japan Airline did, hired a reputable and superb CEO to run this business. Otherwise, why wasting the tax payers money to invest in this non-profitable business?

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