VyvernS, you look confident in MAS that able to do a magical turnaround by 31/12/09

make a note. MAS closed at 3.26

i'm sure there will be a lot of fearing dumping on monday.

dont catch the falling dagger, guys.

Negative equity means investors are paying 3.xx into a company that has nothing in their book but only liability aka in layman term, company has loss all of its asset and capital already previously. If company cannot turn into profit, basically there is nothing left in the company.

So for those paying 3.xx share price on it basically is paying the price on the expectation of the company to make xxx millions in the coming few years.

But the hedging loss is not yet fully realised if not mistaken.
But it has been realised, it will trigger the PN17 violation.

huh... worst worst worst ...

Hi hi Pana.....Yup, confident. I don't think Idris Jala will let his efforts go to waste. He is the right guy at the wrong time....

He has managed to turn around this company. Unfortunately due to rising oil prices and H1N1, somethings just did not go right.

All readers, this is all my 2cents and humble opinion. I already hold MAS shares. All those reading this, please be careful. Do your own research before buying in. There is a risk with MAS, because if any of the waiver conditions are violated, MAS will join Talam & Ekran in PN17..

And there are lots of uncertainty in the airlines industry (Airbus investigation in progress), travel industry (H1N1 virus), commodities industry (increase in fuel costs) and stiff competition from Datuk Tony.

And I still gung-ho holding on the shares....

wont let Mas Bankrup gua...

MAS should still survive if the oil price hike...
But even if government strip off all their debts & left them with cash & they still left with negative equity after a few years, I just wonder shall government do it again?

what to worry, mas still got big boss behind it.
it's ridiculous cuz WE the tax payer is the boss!!

Assign new CEO lah, of coz

After a few years, if MAS keep getting into hot water, then: "Announcing the new MAS CEO, - "Tan Sri" Datuk Tony Fernandez!

government will do tat gua.. zzz

Capital Injection
Method 1 - Use Khazanah Sukuk bond investor money
Method 2 - Use EPF people money

Honestly, do we really want the govt to bail out MAS?

Why do we need the govt to be in the airline business? What's the purpose?

They should not have nationalise MAS.. now it is like a pet project, same like Proton.
Continue to suck and drain the tax payers money.

The govt can provide a one time help.. but that's it. It needs to walk on its own.
No more bail out! If it fails, it fails!

Let other Airlines take over, give those lucrative routes to AirAsia instead since
they're doing a wonderful job of expanding and minimize cost for everyone.

No! No!! No!!!, EPF already invested too much in MAS , die die also must save MAS
if god willing EPF will recover all the money next year

---

Added on June 14, 2009, 10:57 amThis post has been edited by Kinitos: Jun 14 2009, 10:57 AM

most of the losses in this quarter are unrealized. If the fuel prices keep going up, in the next few quarters, you will see MAS announcing profit after amazing profit. Coz they already write it all down this quarter.

MAS announcing profits this year end? If they look down, they can't see their toes now.. how to look beyond 6 months?

Goodness.. they locked in the fuel price at US$100 barrel for this year, and $95 barrel for next year.

Look, I don't think we'll cross $100 dollar barrel this year.. at most, most likely $80-$90 because the economy
really hasn't recover and higher, people will continue to cut back. Discretionary travel automatically get cut, this is
especially true for business.

The Opec cartels are already happy if Oil can reach $75 barrel and they don't want to dampen economy recovery too.
They'll increase production immediately way before Oil gets back to $100.

The bet on the street is they'll burn through all the remaining RM3 billion cash and they'll ask the govt for bail out money.
The CEO will be replaced!

MAS can always sell the 6 billion $100 fuel hedge to Petronas owned by Khazanah
and again buy another 20 billion more $60 forward crude oil and jet fuel derivatives from Goldman gang, second time won't kena tipu again wah...

If they've written down the losses of the Hedge at $70, wouldn't they be able to say Profit the next quarter, if the fuel hits $80? It doesn't have to go up to $100, just higher than the number they wrote down the loss at. Right?

I'm not saying this in support of MAS, in fact i think MAS is a pretty good airline, but is a shitty company and a shitty counter.

This post has been edited by elhh82: Jun 14 2009, 11:59 AM

Folks,

1) With so many profitable industry around selling at bargain price, why are you investing in money losing industry like airline??

2) Now, what makes you think MAS can be profitable?? It is NOT the best managed company. And, it is in a money losing industry.

Do not fall in love with any counter. Your goal as an investor is to make money.

Dreamer

It has got to do with the myriad of complex accounting standards,
i.e FRS and IAS blabla ..

The accounting standards require companies to disclose possible liabilities, circumstances that may cause the company to not being able to be going concern in the next 12months .

And the standards require that NO unrealised profit be shown in the financial statements, however probable the profit may become realised in the near future.

As in the case of MAS, they posted loss because of UNREALISED (sorry for the CAPS, need to emphasise the point) oil hedging, and not because of mismanagement of the Board of Directors.

The oil hedging can always flip and suddenly wallah,
the company is the black .

Well it is so much easy to simply criticize others when things don't go well, no ? Idris Jala took over the company when MAS was in a shamble, like hidup tamau, mati segan like dat.

He's doing his best to turnaround the company, made hard decisions when he is required.

I doubt the company's in a better position if the old management is still entrusted to manage MAS.

And airline services is much more complex than one might think. And not to belittle Datuk Tony, but if may have problems handling MAS if he is given the task to do so. Yes, he's done good job in AirAsia, but with MAS, it's a different ball game.

That's from P&L view.
On cash flow side, since the forward contract are still in force, MAS is still liable to take and pay for delivery of contractual quantities of fuel at prices above current market.

Unless MAS choose to default on those contracts. Then all traders will be complaining "Janji orang malaysia langsung tak boleh harap"