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AirAisa’s Share Price Drops Close To 10%

The disappearance of AirAsia’s aircraft since 28th December has seen its share price taking a hit when the market opened on Monday, 29th December.

Its share took a hit of some 9.3 percent and closed at RM2.69 on 29th December.

At the time of writing, AirAsia’s share is now at RM2.72, still some eight percent off 26th December’s close at RM2.94.

Despite the hit felt in the share price, AirAsia still looks fundamentally unchanged.

The major costs that many shareholders were afraid of would be that pertaining salvage and claims. That, however will be adequately covered by insurance.

There are, however 2 main concerns from CIMB Equities Research. To what extent will passenger demand in Indonesia fall, and for how long; to the extent of this incident affecting the Malaysian and Thai operations of AirAsia.

Share price pressure in the immediate term of AirAsia is expected to be felt from this incident, and economists pointed that AirAsia is still fundamentally strong, and is expected to benefit from lower jet fuel costs in 2015.

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