Here is a snapshot of all the warrants outstanding issued by various brokerages on AAX mother share.

Just a summary first.

There is a total of 750mil warrants out there (with various conversions to mother share, non exerciseable), with a value of RM129.2 mil. This money is with the bankers post issuance.

This showed that the bankers have a big stake in ensuring the price doesn't go above their exercise prices.

There are 10 different warrants issued:

Investor Issuer Currently
Issuer Expr Profit Profit Buyer/Issuer
1 AAX-C1 RHBIB Jul-17 Above 0.65 Below 0.65 Lose/Win
2 AAX-C2 Macq May-17 Above 0.72 Below 0.72 Lose/Win
3 AAX-C3 Macq May-17 Above 0.62 Below 0.62 Lose/Win
4 AAX-C4 MBBIB Aug-17 Above 0.535 Below 0.535 Lose/Win
5 AAX-C5 MBBIB Aug-17 Above 0.635 Below 0.635 Lose/Win
6 AAX-C6 AM IB Aug-17 Above 0.53 Below 0.53 Lose/Win
7 AAX-CW KIBB Apr-17 Above 0.57 Below 0.57 Lose/Win
8 AAX-CX Macq Feb-17 Above 0.75 Below 0.75 Lose/Win
9 AAX-CY KIBB Jun-17 Above 0.55 Below 0.55 Lose/Win
10 AAX-CZ RHBIB Mar-17 Above 0.6 Below 0.6 Lose/Win

There are some warrants is quite close to the breakeven price, and this is a big risk for the issuers, representing money in excess of RM30 million. Now, they can surely use this money to dump shares in the market, however they need to buy it first, or, they will create the sentiment to push investors to dump the shares.

Although I have no evidence that the issuers are collaborating on giving the stock a "sell" rating, their real actions in the stock market could be different than what they recommend.

I think the outlook will be quite different in mid 2017, when most of the warrants would expire.

Then AAX stock could fly higher. So for now, we can keep on accumulating.

In summary, a call warrant is a bet between the issuer and the buyer that the price of the stock will be below/above the strike price, and the breakeven price.
In this situation, there is always a winner and a loser, unlike owning a share outright, which is a win win situation.

I guess there are people here from the banks who have issued so many warrants/options on AAX mother share, and now they are so worried it will go above and they will lose. Perhaps some people might lose their jobs too...is this the reason why some people here is overly bearish, for a company that is reporting good performance?

I can't easily find any Malaysian company growing revenue 40% yr/ yr and 20% qtr on qtr. I will jump to own this stock with great global exposure.

I have read the quarter report. It is a great result from AAX. The performance is really good. I wonder who is so not smart to sell it.
Anyway, i will buy more and keep.
Kudos to AAX management and staffs for coming back from the dead.

I have made a big purchase of AAX. When is the quarter report? I thought yesterday or today?

Rahza, we know you are very enthusiastic about AAX. Just articulate your thoughts and opinion and group them and summarize them so we understand it clearly. No need to troll the forum with many incomplete comments. This way, we welcome your comments and thoughts.

So i checked in bursa website, if you go to AAX page, they show the recalculated price of the IPO as 82 cents like that, so it is no longer 1.25+.
So for original investors like me, i never refer to 1.25 anymore, my reference point is 82cents. If price is more than this, it is more than the IPO price.
Also as the original investor, i also received free shares and warrants, i included them in my overall holding and my cost basis drops further. So you can imagine that for lots of original investors out there, their breakeven is somewhere around 70 cents.

Wahh..today exactly on the TP in this site

Rahza, for original investors, the breakeven price is no longer the IPO price. This is due to the free shares given out and the rights warrants given out as well. I think it could be in the region of 70 cents...

And just recently, AAX or Airasia has expanded its capital by selling new shares to Mr Tony and Kamarudin, so now it will be even lower returns from each shares, but the price should not be diluted by this action, although it just might.

rizerlee, i am same opinion on the fly through, but it seems lots of obstacle to it due to regulations. Most budget airlines only allowed point to point. It is not fully open competition.

kensen, you offended me ever so slightly, but it is ok :)
If you noticed, i never ask others to buy AAX or anything else. I only mentioned what i am doing or what i will do. So others can make their own judgement. In short, i am giving away my opinion, so when all of us provide such opinion, a reader may decide his best course of action.

kensen, you invests in bonds? Care to explain why is that and how are you doing it? In a low interest environment, why are you going for bonds?

BTW Good Companies means friendship, friends etc. Not company..company...So..cheers!

kensen, you are talking like u r an angel.
AAX experienced a plane crash, then ringgit depreciation, and of course, the over hedging.
Without these factors, AAX will be profitable already. Now competitors are jumping on AAX because they enjoyed lower fuel costs faster than AAX did, and they dont have a plane crash to boot.

I checked in Q4 in 2014, the average ticket prices actually was pretty high, reaching 600+. So this can be done, so i think in Q4, profit will be there.

Sorry, the load factor is not 1, it is 67% for the first, and 77% for the last sim. You just divide passengers carried with the seat cap.

Say AAX increase fares (which they are doing now) and cut capacity and fuel goes just a bit lower, but i corrected for ringgit:

Revenue (in thousand) 712,898
Staff Costs 70,887
Depreciation 38,175
Fuel 191,009
Maintenance 197,947
Aircraft Lease 166,972
Other Expenses 28,402
Other Income 5,275
Operating Profit 24,781

Seat Capacity 1,111,301
Passengers carried 860,944
Load Factor 1
Average Fare 444
Ancillary rev from passengers 140
Average Fare Total 584
Total revenue 502,791,296
Fuel Consumed 776,459
Fuel Price (USD) 60
Fuel Cost RM 191,008,914

Profit at 25 mil and at 860k passengers.
My conclusion is, AAX must cut capacity fast by idling the planes or charter more and of course, increase fares.

Ok Guys, i have done my own simulation of the Q3 and Q4 ... Let's see.

Current
Revenue (in thousand) 653,028
Staff Costs 75887
Depreciation 38175
Fuel 218860
Maintenance 207947
Aircraft Lease 186,972
Other Expenses 30,402
Other Income 5275
Operating Profit -99,940

Seat Capacity 1,211,301
Passengers carried 810,944
Load Factor 67%
Average Fare 415.91
Ancillary rev from passengers 130.27
Average Fare Total 546.18
Total revenue 442,921,394
Fuel Consumed 833,459
Fuel Price (USD) 71.8
Fuel Cost RM 221,416,718

Now let's do some projections:
Say AAX suddenly got lots of passengers;

Revenue (in thousand) 745,879
Staff Costs 75,887
Depreciation 38,175
Fuel 219,680
Maintenance 207,947
Aircraft Lease 186,972
Other Expenses 30,402
Other Income 5,275
Operating Profit -7,910

Seat Capacity 1,211,301
Passengers carried 980,944
Load Factor 1
Average Fare 416
Ancillary rev from passengers 130
Average Fare Total 546
Total revenue 535,771,994
Fuel Consumed 853,459
Fuel Price (USD) 66
Fuel Cost RM 219,680,347

This is a leap in passengers number, which is quite unlikely right now. Therefore still loss.

Now say AAX cut the number of planes it has:

Revenue (in thousand) 647,566
Staff Costs 70,887
Depreciation 38,175
Fuel 198,316
Maintenance 197,947
Aircraft Lease 166,972
Other Expenses 28,402
Other Income 5,275
Operating Profit -47,858

Seat Capacity 1,111,301
Passengers carried 800,944
Load Factor 1
Average Fare 416
Ancillary rev from passengers 130
Average Fare Total 546
Total revenue 437,459,594
Fuel Consumed 770,459
Fuel Price (USD) 66
Fuel Cost RM 198,316,147

yes, it is still a loss.
I have some more simulation...

Rileks lah, malaysia gov has hundreds os billions stashed in the economy and overseas. Petronas alone has 125 billion in cash.
Didn't you all hear what Zeti said yesterday,
Let the foreigner take out their money, they will lose on the share price drop, then lose more when the convert to USD. If we intervene and increase our ringgit, the foreigners will benefit at our expense.
Well, that's my take on it anyway.

Good post guru Koon, but the last point was egoistic, but it is ok for someone of your stature and wealth.
Anyway thank you for sharing with us, we appreciate it greatly and wishes you well.

Wrong statement at the opening. Currencies are not valued based on other currencies!
Currency is issued according to assets that were produced.
These assets exists and continue to generate value and wealth, and the circulating money is backed by the value of the continuously generated wealth. If the asset evaporate and generate less new wealth, the circulating money will devalue.
That's about it!
ref from 259trillionvs5trillion.com

Good point rizerlee.
AAX passengers has not grow at all since the crash in dec.
The next quarter, they must grow significantly or we will all be in trouble.

SinGor,
The negative interest rate is to punish banks that put money into the central bank. They have to pay to safe keep the money. Normally banks deposit reserve into central bank earns zero interest.
You explain that deposited money earn interest from the Fed, that is not negative interest rate. That is positive interest rate.
Also this either positive or negative has nothing to do with the value of the dollar itself. The dollar buys what it normally buys, it has value according to what it can buy. Inflation/deflation may affect the value, but it is still valueable.
Back to the positive interest rate, it is like a bail out by the Fed to the banks as it seems... :)

Bigmac price has been decreasing when compare to the disposable income.
So even bigmac is getting cheaper as you can buy more of it compare to before.

CI will continue to drop. Not until things settles. Malaysian companies are going through another adjustment, right after GST impact. So it is tough.

Technology is making things better, and cheaper all the time. Old tech quickly devalues and drops in price. So deflation is not necessarily bad, in many instance, it is good.

SinGor, i disagreed USD is worthless paper. The paper itself is worthless, but the asset it represent is not. Similar like a cheque, the paper is worthless, but the number there is not.
Deflation is a steady theme in our economy, just many people don't realize. Majority of goods are dropping in price. Remember the TV of 4 years ago? The price around RM12,000 or so? Now the price is RM1,500 only. Phones? Camera? Mouse? Harddisks? Computers? Internet? All have dropped. None has increased.

zhongkui, i owned 10% of my entire stock holding in AAX. I am not very rich lorr...also i am very conservative.

Goodlah foreigners cabut. They are taking enormous losses...they have to dump ringgit and convert to USD at a really bad rate...maybe loss up to 50% or more. Currency losses and stock price losses. Pity those foreigners...
Only smart foreigners will look for things to buy...really good companies!

SinGor, my point was, USD does have value, and so is our ringgit. They are not worthless papers, they are backed by real assets.

Anyone have the detail on the passengers carried by AAX? It was just released according to news i read. It says passengers carried droped by more than 20% compare to last year, and about 13% from previous quarter, if i am not mistaken.

I also own a bunch of AAX shares, price ranging from 87c to 40c. I will only sell if the individual purchase turns positive. I have no problem to ride this one out for a long time.

Kain Leong, I am also optimistic. There are quite a number of us around still.
We declining ringgit, FGV income will go up as it sells in dollars.

thekingfish, your observation is spot on.
Greenspan says bubble is only starting to form..next many years, will become big bubble..

On the part of bond bubble, that part is correct. Japan is nasty in issuing bonds, more than America. They are heading the Greece way in the near future.

Please check this out http://1-million-dollar-blog.com/whats-backing-ringgit-pocket/

SinGor, that is not true.
USD dollar is backed by real assets in the economy.
So is our ringgit. It is backed by real asset, it is better than useless gold which has no utility. If you are a stock investor, you will understand this.

BN_menang,
Your nick is brave in this time and age... :)

epfbuy
Can you give me mre details on your reading on the no feud?
I am insterested to know. Also any other detail that you know that you want to share with us?

kleboy,
Not sure lah..i think they are as bullish as i am.
I am still bullish for cimb in the long term, but the risk of a political fallout is now too great.
The moment my tranches turns positive, i will exit until CIMB reach my average regular stock holding.

Commodities has been dropping or should i say collapsing since 2012/2013. This is not 'new'. However the article pointed a coincidence previously, but will it be the same this time around?
In my opinion, stocks will not crash. It will go sideways for a long time..with wild gyrations as usual.
The way i see it, the global economy will be fine if India and Africa enters the markets..opens up in big ways.
Otherwise, we may have too much overcapacity and overinvesments..

I have new funds, i am buying airasia. No need to q, i just but at market rate

Also, your USD you keep in your account, is it included into the international reserves? Think about it lah. Is it your money, or BNM?
Like i said, don't make a statement you know little about.

Tena and Ambuk,
I said most of the money are owned by foreigners, not you.

When you sell things overseas, where do you buy the things? You import it? That's entreport thing.

If I assume 60% of the reserves are foreigners money, the remainder is your money, then it is ok for our reserves to drop 60% when the foreigners took out their money right? If you don't give foreigners their money, who will? Your exchange rate will drop drastically and we have to ask someone else to give the money.

klebou, not losing money, it is only on paper. So relax, just collect the dividends. When the time is right, can exit.
I have completed my assessment of CIMB, politically. I will make a reduction in my holding. Too bad, Nazir talked too much and not supporting his brother.

I rode through the up and down recently, and surprised, i made good money. It is not risky buying china, if you buy good companies!
Currently i am fully invested in HK/China

I think tomorrow it will go up

Tena, which route is 30% load factor? If you can be specific, i would like to know. Airasia is normally well ran, so i dont understand some people say they are badly managed.

We are supposed to spend down our international reserves as demanded by foreigners when they repatriate their money.
International reserves isn't money owned by Malaysia, it is owned by foreigners mostly.
So don't make comments if you have not read about international reserves.

If you want to invest money in China, you will bring your ringgit and convert it into Yuan. China will hold the ringgit as international reservers. When you exit from the country, you will convert your Yuan back into Ringgit. So the central bank will give you back your ringgit. So it supposed to be spent. Witholding the reserves is bad, it is not good for the exchange rate. The trick is not to frontload and allow the central bank to go to the front and intervene in the rates.

MMSSS so true...
i think they just need money of their own to give to airasia group

Not the same as Malakoff the other day. If the price stays above the IPO price steadily, then someone is continuously buying. This is good news, and once sellers subsides, the stock will go up.
Malakof the other day, the stock was mostly below the IPO price, which means the shareholders bailing out even at losses.

That's mean Tony and co is cash strapped. This also means that he will fight like hell to keep his empire alive. That is good news to me.