AA reported flat Q4 year-on-year revenue, which is unusual for AA, as Q4 is a peak season due to the holidays.

So folks, will weak Q4 results carry over into Q1FY14?

Will there be a playback of emerging market risks? Investors have short memories!!

Despite positive macroeconomic evidences for Malaysia of late, there is too much uncertainty for the market to digest this week.

» Geopolitical risks have heightened with the developments in Ukraine. MH370 has also taken a new dimension after the revelations over the weekend.

» The Fed’s FOMC will meet on Wednesday (19 March) and may announce further scaleback in its QE3 by purchasing USD55b instead of USD65b of assets per month. On this potential announcement, expect the greenback to gain ground, which is market negative as far as Bursa is concerned.

» The unravelling of China’s economic slowdown is expected to continue in the foreseeable future. Any weak statistics coming out of the country has now become fodder for pessimism.

» Oil price is making a reversal, and is likely to weigh down sentiment towards commodities in general.

» The Kajang by-election is on Sunday (23/3). Reaction to the outcome may have heavy impact on the market.

Source: MIDF

Half-way through March, the prospects do not appear to be as bright as before. The confluence of events has heightened the market risks this week.

To add to the uncertainty, the technicals have worsened. After holding up at the 50-day moving average (50DMA), the KLCI lost that support level last week and appears to be racing towards the 200DMA, which is at 1793 points. We expect the 1,800 support level to be surrendered this week as we doubt that the “invisible hands” would want to
interfere when sentiment is rather fragile - MIDF

For the year to date, foreign funds have pulled out -RM6.54b net from Malaysian equity. Still, we estimate an overhang of foreign liquidity amounting to RM27.4b, for cumulative money flow since January 2010.

How? Careful now? Hahahahahahahah!~!

Global funds sold -RM989.3m of Malaysian stocks in the open market in the last trading week, the highest in 5 weeks. This was an increase from -RM218.9m outflow the week before.

Foreigners sold every day, except on Tuesday. On Wednesday, the size of the pullout surged to -RM399m, the second highest this year, after the -RM556m drain on February 4. Selling continued to be heavy on Friday (amounted to -RM397m), which is rather ominous for the market this week.

Investors have short memories!! Heheheheheheh!!

Foreign investors turned bearish on Malaysia last week.

Folks, AA trying their best to conserve cash by selling 6 existing aircraft & reduce cost by deferring 19 aircraft deliveries!

But what about a dividend policy of 20% its net operating profit Rm705m? That a staggering Rm141m for FY2013 dividend.

Remember folks, AA profit after tax (PAT) for FY2013 only at rm364m. Will AA practice what it preach by giving out rm141m as dividend?

Hmmmmmmm......Time will tell!

Folks, only Wellington is supporting this counter after the 4Q announcement.

All of this raises the question: What do Wellington know that CEO, owners & EPF don’t? Hahahahahahah!!

The weakening MYR against the USD also saw higher costs incurred on USD-denominated expenses & borrowings.

So folks, will weak Q4 results carry over into Q1FY14? Investors have short memories!!

Heheheheheheheheh!!

Folks, AA is facing heavy competition, and it might not be able to pass on to passengers the 9% rise in landing charges from January.

What’s more, there is an upcoming 9%-11% rise in airport passenger service charges in February and the 6% GST in Malaysia from April 2015.

Which charges is it thinking of passing on to its passengers? Or is it going to absorb all the charges? Investors have short memories!! Hahahahahah!!

Members of the Federal Open Market Committee meeting Tuesday and Wednesday will reduce monthly purchases of Treasuries and mortgage-backed securities by a combined $10 billion to $55 billion.

Of particular interest to investors will be whether the Fed moves away from numerical thresholds and toward qualitative guidance on the conditions that would prompt the Fed to increase its benchmark interest rate above zero, where it has been since December 2008.

The beginning of the end for equities? The investor of today does not profit from yesterday's growth. Hahahahahahahahahah!!

Folks, latest WELLINGTON MANAGEMENT COMPANY acquired:

03/03/2014 110,400
04/03/2014 1,059,200
05/03/2014 1,150,600
06/03/2014 3,967,600
07/03/2014 1,150,000
10/03/2014 1,109,000
11/03/2014 1,030,000
12/03/2014 501,300

Folks, only Wellington is supporting this counter after the 4Q announcement. All of this raises the question: What do Wellington know that CEO, owners & EPF don’t?

Investors have short memories!! Hahahahahahah!!

Folks, the key highlights of the week include Chinese foreign direct investment and house price data expected early in the week, the release minutes on Tuesday from the Reserve Bank of Australia's last meeting and a central bank meeting in the Philippines on Thursday. Japan trade data is also expected in the week.

Outside Asia, focus is likely to fall on a two-day meeting of the U.S. Federal Reserve, which concludes on Wednesday. The Fed is seen moving ahead with a scaling back of its monetary stimulus, with another $10 billion "taper" of the bond-buying program to $55 billion a month.

How then AA? Up or down? If a business does well, the stock eventually follows! Heheheheheheh!!

A busy week ahead starts with Asian markets digesting key weekend events: A widening in the Chinese yuan's trading band and exit polls showing Crimea has voted to join Russia in a move that could fuel risk aversion.

So will AA rally continue?

Risk comes from not knowing what you're doing! Dare to buy, folks? Hahahahahahah!!

Thanks god its Friday........tiem to party! Cheers folks!!!

Folks, U.S. stocks ended Thursday with the worst declines in more than five weeks, with the S&P 500 closing below a key technical level and turning negative year-to-date.

Uri Landesman, president at Platinum Partners, says fund managers had been expecting a correction even as markets have been resilient up to this point.

“At these levels markets cannot tolerate any bad news. Fundamentals have been so stretched that we think we will have a significant correction by the end of this month,” Landesman said.

“We are watching at what level the S&P 500 closes today, if it goes below 1,850 it might turn into the beginning of the correction,” he added.

Dare to hold more shares, folks? Careful now! Hahahahhahahahahahahah!!

USD/MYR
Prev Close: 3.2735
Open: 3.2810
Bid : 3.2870
Ask : 3.2880

Remember folks, weak ringgit is not good for airlines in Malaysia!! Dare to buy? Hahahahahahahahahah!!

It’s hard to know exactly what knocked markets sharply lower Thursday. It may be a combination of economic data from China, U.S. and possible weekend unrest in Ukraine.

Tensions are running high and perhaps an assault could take place after Sunday’s Crimean vote.

China has now entered the controversy telling the U.S. and the West it could retaliate against any Russian sanctions.

Time to sell or buy, folks? Hahahahahahahahah!!

Outstanding Aircraft Orders for Low-Cost Carriers in S.E.Asia

AirAsia A320:337 = 337
Air Asia X A330:39 A350:10 = 49
Citilink A320:25 = 25
Lion Air A320:169 A321:65 B737:303 B787:5 = 542
Tigerair A320:10 = 10
Vietjet Air A320:63 = 63
Jetstar B787:11 = 11
Nok Air B737:15 = 15

Sources: Airbus and Boeing

Cont...

Folks, the last option for overstretched LCCs is to open up new routes to as yet unserved destinations. This could result in a rash of new LCC routes into potential markets such as Australia or China (traffic rights permitting) or a boom in more local S.E Asian services using highly efficient turboprop aircraft instead of airport-limited jets.

As Nok Air Chief Executive Officer Patee Sarasin says, running a profitable LCC operation is not just about having more capacity or filling more seats than your competitors.

Folks, as the recent sets of results have shown, it is about ensuring that seats pay for themselves. “It is not about price,” Sarasin cautions. “It is about value.”

Hmmmmmm..!!

Cont...

Folks, according to Garuda CEO Emirsyah Satar, other changes are looming. “I think . . . there is going to be consolidation,” he said in a recent interview. “You see it at airlines in Indonesia. Some of them are already closing their routes; they will be consolidated.”

Consolidation is only one alternative to potential overcapacity—and anathema to some of the high-brand-value players.

Alternatively, carriers may dispose of older, less-fuel-efficient aircraft to keep up yields as AA has said it will do.

Folks, the problem then arises of a corresponding glut of older, inefficient aircraft that are unattractive to all but the cheapest of buyers.

This scenario will not add cash to empty coffers. So how then? Heheheheheh!!

Cont...

“Some of these people are really bleeding,” asserts LCC Scoot's Greenway.

Folks, as a result some are now taking action. Fernandes has announced that AA will put off delivery of seven A320s in 2014, and 12 A320s in 2015—ostensibly to wait for delivery of A320neos. Fernandes also committed to “slashing costs” by up to 5% in 2014 through sales of less-fuel-efficient aircraft and by reducing staff.

TigerPhilippines has sold off its Tigerair Philippines subsidiary to Cebu Air, following exceptional charges on losses. “The disposal of TigerairPhilippines will put us on a better footing going forward . . . [but] the macro environment remains difficult,” says Tigerair's Koay.

Merpati has surrendered some of its longer-haul routes in East Nusa Tenggara to Indonesian flag carrier Garuda, citing a move to “improve services.”

Jetstar has deferred delivery of three 787s, “restructured” its A320 orderbook, and put expansion plans for Jetstar Asia on ice.

How now? Heheheheheheheheh!!

Cont...

Not all commentators agree with ongoing expansion predictions for the region. “In my opinion, there is too much spare capacity in this region,” warns Steven Greenway, head of commercial at Singapore-based long-haul LCC Scoot. “The problem with many of the LCCs is that is if you look at the figures [for entities] like AA, Jetstar and even Tiger, the short-haul narrowbody market has way too much capacity floating around.”

Which means that for players who have already committed to large orders, yields have to drop in order to maintain market share.

Lion Air's Kirana was tight-lipped on the subject of yield, but Tigerair Group CEO Koay Peng Yen, commenting on Tigerair's third-quarter 2013 results, is more candid. “Our third-quarter operating performance was dragged down by industry overcapacity which . . . led to weaker yields and lower load factors,” he admits. Others put it more strongly.

Cont...

In Australia, too, a bitter fight for market share and public support is raging. Virgin Australia placed a series of advertisements in the country's mainstream media lambasting Qantas for potentially wanting to take on public debt.

The ads blatantly criticized Qantas, advising foreign investors to think twice before investing in Australia if the government helped bail out the flag carrier following its reported $225 million loss in 2013.

This was just before Virgin Australia—which also has a 60% stake in LCC Tiger Australia—announced 2013 group losses, after tax, of $83.7 million.

Hahahahahahahahhahaha...what come around goes around!! Any comment, folks?

Cont...

In a recent series of remarks that went out on Twitter just before the dismal figures for AA were released, CEO Tony Fernandes hit the social media with harsh criticism of Malaysian Airline Services (MAS) for reporting a 1 billion ringgit ($305 million) loss.

“MAS lost over a billion,” Fernandes tweeted. “So much money wasted. If people were more efficient, Malaysians would spend less on travel.”

Given that just days later his AAX posted a pre-tax loss of $64 million in fiscal 2013, this seemed to be a paradoxical comment.

What say you, folks? Heheheheheheheheheh!!

Cont...

folks, potentially, the S.E Asia market is approaching a situation where there could be too much choice, even for that massive one-billion-passenger estimated market.

And that brings the prospect of a scaling back by some of the more prominent players involved in the relentless market expansion.

As in other regions, strong personalities and big egos are involved, not always to the benefit of bottom lines. For some, it is all very personal.

Hmmmmmmm.......!!

Cont...

Folks, this bleak news is arriving on the heels of reportedly great load factors, indicating that airlines are already opting for bulking these up at the expense of yields.

For example, Lion Air CEO Rusdi Kirana underlines his company's success in filling aircraft: “We are still seeing load factors of 90 percent or so, and the market is growing by 15 percent a year,” he said recently.

The same is true for AA. In the fourth quarter of last year, the whole AA group recorded an increase in load factor to 81%, compared to 80% in the same quarter in 2013.

Indeed, financial analysts from Malaysia's CIMB bank have noted that “some airlines have given up the goal of high yields in order to push up aircraft utilization and defend . . . market share.”

Heheheheheheheh!!

cont.....

But folks, warning signs suggest the suppliers of the aviation growth are not being realistic about the opportunity. Some players are making expansion plans that are hard to justify and may be hard to pay for in the long term.

Recent figures from AA reported a 4Q profit drop of 19%. Batik Air canceled an order for 5 B787s (although it reportedly wants to replace them with 737s). Tigerair Singapore reported an operating loss of $13 million in third-quarter 2013, compared to an operating profit of $21 million in 2012. AirAsia X (AAX) put delivery of seven new A330s on hold until “the timing is right,” says an airline official. The reason cited was poor figures, allied to uncertainty about the political situation in Thailand. AirAsia X bought only an additional 25 A330-300s in late 2013

Folks, both Airbus and Boeing have released glowing predictions about the market for aircraft in S.E Asia, although there are signs that some of the airlines may have been overly optimistic.

Established players such as AA have placed orders for hundreds of aircraft. Lion Air has started taking delivery of its record order of 500 plus A320s and B737-800s. Relative newcomers like Vietnam's VietJet are poised for more than 90 new A320s, and Thailand's Nok Air is buying 15 B737s.

There is no doubt airlines are convinced there is a strong case for market expansion, and aircraft manufacturers, leasing companies and banks all happily agree. It is really good business for them, after all. Heheheheheheeheh!!

Yes folks, Airasia trying their best to conserve cash by selling 6 existing aircraft & reduce cost by deferring 19 aircraft deliveries!

But what about a dividend policy of 20% its net operating profit at 705m? That a staggering rm141m for FY2013 dividend. Remember folks, Airasia profit after tax (PAT) for FY2013 at rm364m only.

The management also would likely not undertake any share buy-back this year, given its preference to conserve cash. So how about 141m for dividend? Hmmmmmmm......Time will tell!

AirAsia CEO Tony Fernandes has announced plans to defer 19 incoming A320ceos (7 aircraft in 2014 and 12 in 2015) as his airline pushes to cut costs after announcing falling profits.

Fernandes says the carrier would continue to focus on cutting costs by selling 6 existing (older) aircraft and reducing staff, among other measures.

The group after the deferral will take 28 A320s in 2014. AA expects to use the US$120m proceeds from the sales of 6 existing aircraft to fund the delivery of 28 new A320s

But folks, some analysts were quick to highlight the potential residual value risk as demand for second-hand aircrafts may be lacklustre given airlines’ preference for newer generation aircrafts and the more favourable financing terms for new aircrafts.

How then? Heheheheheheh!!

Folks, Changes in Director's Interest:

1. Dato' Kamarudin Bin Meranun
Acquired 14/11/2013 1,000,000 2.545
Acquired 29/08/2013 700,000 2.535
Acquired 02/09/2013 300,000 2.585
***********Disposed 07/08/2013 2,292,900 3.180

2. Dato' Abdel Aziz @ Abdul Aziz Bin Abu Bakar
***********Disposed 17/10/2013 50,000 2.810
Acquired 23/08/2013 50,000 2.660
***********Disposed 05/06/2013 50,000 3.500

3 Tan Sri Dr. Anthony Francis Fernandes
***********Disposed 21/08/2013 10 3.180
Acquired 22/08/2013 500,000 2.810
Acquired 22/08/2013 200,000 2.790
Acquired 22/08/2013 200,000 2.780
Acquired 22/08/2013 100,000 2.770
************Disposed 07/08/2013 2,627,000 3.180

Now folks, try to understand why they disposed? Relentless tendency to regress towards its long-term mean? Careful now! Hahahahahahahahah!!

Folks, the last date shares transacted by substantial shareholders:

1. Wellington: Acquired 06/03/2014 3,967,600

2. Employees Provident Fund Board: Disposed 05/02/2014 75,000

3. Late Sep 2012, Tune bought a total 68,030,000 shares at rm2.91 per share = Rm197,727,720.00 when the stock took the beating after the announcement of Malindo.

Now the big questions: As of 14/03/2014 why aren't the substantial shareholders buying more? AA getting cheaper below 2.00 soon? How now, folks?

Hmmmmmmmmm...!!

Regulated Short-Selling on Airasia

13/3/2014: 2.488 1,391,700 shares
12/3/2014: 2.486 142,800 shares
10/3/2014: 2.514 82,400 shares
07/3/2014: 2.514 993,300 shares

Now the big question: will AA stay above 2.50? Time will tell! Careful now, folks! Haahahahahahahahah!!

AA is lowering its airfares to sustain these loads to raise awareness and stimulate demand. Thus, yields expected to drop, attributed to intensifying competition from Malindo Air and Malaysian Airline System.

SO Will weak Q4 results carry over into Q1FY14? Careful now! Hahahahahahah!!

It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price.

Did you folks? What a pity! Hahahahahahahah!!

Should you find yourself in a chronically leaking boat, energy devoted to changing vessels is likely to be more productive than energy devoted to patching leaks!

How? Heheheheheh!!

Folks, it may just be one step away, but the road to an official take-off for AirAsia India is still fraught with “political potholes”. Tan Sri Tony Fernandes is confident his tripartite low-cost carrier (LCC) venture could be launched in December 2013 or January 2014, after having received a No Objection Certificate from the Indian Ministry of Civil Aviation in September.

Now toward March 2014, after going through numerous bureaucratic roadblocks and political power-plays will Airasia India finally get the OP or will Airasia India call it a day?

Investors have short memories!!

1. The budget airline has said that it plans to raise between $150 million to $200 million in an IPO in the third or fourth quarter 2011 here: http://www.reuters.com/article/2011/03/03/indonesia-airasia-ipo-idUSJKB00436120110303

2. AirAsia Indonesia postpones IPO until 2012 here:http://www.budgetairlineguide.com/news/179/airasia-indonesia-postpones-ipo-until-2012/

3. AirAsia eyes Indonesia unit IPO by first quarter next year 2013 here: http://www.reuters.com/article/2012/06/18/us-malaysia-airasia-ipo-idUSBRE85H0VV20120618

4. AirAsia Indonesian Arm to Seek IPO in Third Quarter 2013 here: http://online.wsj.com/news/articles/SB10001424127887323701904578276932835789500?mg=reno64-wsj&url=http%3A%2F%2Fonline.wsj.com%2Farticle%2FSB10001424127887323701904578276932835789500.html


5. AirAsia Bhd's initial public offering (IPO) in Indonesia has been delayed to the fourth quarter of this year (2013)or the first quarter of next year (2014) here: http://www.thestar.com.my/Business/Business-News/2013/08/13/AirAsias-Indoneisa-IPO-Pla-Delayed.aspx/

6. Listing plans for Indonesia AirAsia will likely be shelved here: http://klse.i3investor.com/servlets/ptres/21854.jsp

Investors have short memories!! Heheheheheheh!!

1. AirAsia may kick off India operations in June 2013 here: http://articles.economictimes.indiatimes.com/2013-03-05/news/37469791_1_telestra-tradeplace-airasia-kingfisher-airlines-ceo

2. AirAsia plans to start its low cost airline out of India by September 2013 here: http://www.thehindubusinessline.com/industry-and-economy/logistics/airasia-to-start-india-operations-by-sept/article4613598.ece

3. AirAsia aims to start operating in India from October 2013 here: http://indiatoday.intoday.in/story/airasia-aims-to-commence-india-operations-october-lower-airfare-improve-networks-india-today/1/286512.html

4. AirAsia to start operations in India by end of 2013 here:http://timesofindia.indiatimes.com/business/india-business/AirAsia-to-start-operations-in-India-by-end-of-2013/articleshow/20836986.cms

5. AirAsia India will be able to start operations only by February 2014 here: http://www.telegraphindia.com/1140101/jsp/business/story_17739704.jsp

6. AirAsia India to start operations in March 2014 here: http://finance.yahoo.com/news/malaysia-press-airasia-india-start-005532756.html;_ylt=A2oKmJwkWSFTswkAPfbjPwx.;_ylu=X3oDMTBzcXU3dXExBHNlYwNzcgRwb3MDNTgEY29sbwNzZzMEdnRpZAM-

7. AirAsia CEO, Tony Fernandes has announced India operations are aimed to start in April 2014. here: http://www.totalbluesky.com/2014/01/23/airasia-india-operations/#sthash.MsgKtfc3.dpuf

8. AirAsia India Aims To Start Operations In May 2014 here: http://my.news.yahoo.com/video/airasia-india-aims-start-operations-120000244.html

So what next? Hmmmmmmm..!!

China's January-February economic data released Thursday disappointed to the downside, sending stocks lower.

So folks, how is AA doing? Disappointed & frustrated on lack of buying support? Hahahahahahaha!!

Shares of stock lose value when company profits drop or investors believe that company profits will drop! Careful now!

Dare to buy at the current price, folks? Remember folks, AA management concedes that it would likely not undertake any share buy-back this year, given its preference to conserve cash.

But why? Knowing 2014 & 2015 will be difficult year? How? Hahahahahahahahhahah!!

The Delhi High Court was today informed that the Election Commission has been approached to decide whether further approvals to operationalise the USD 30 million deal between Tata Sons and Malaysia based AirAsia would violate the model code of conduct.

"In any case, the issue will finally be decided by the next government. The Election Commission of India is looking into the question as to whether any further order will violate the mode code of conduct," BJP leader Subramanian Swamy told a bench headed by Acting Chief Justice B D Ahmed.

The court considered the plea and fixed the matter for further hearing on April 23. Cloudy sky for Airasia India? What say you, folks? Heheheheheh!!

Folks, what airlines are doing is something akin to a beggar giving out alms. With money scarce to run even their day-to-day operations, airlines are competing with one another to offer discounts.

Yields, have already halved in February because of continuous fare discounts by almost all airlines since the beginning of this year. March will continue to witness low yields as well.

Airlines across the board may already be racing to the finish line with blood streaks across their balance sheets with March quarter expected to show record losses for all. Heheheheheheh!!

Folks, airlines need money to run daily operations but race to offer discounts. Fighting for survival!!

Hmmmmmmmmmm..!!

Last week, the Delhi high court issued notices to the government, the Foreign Investment Promotion Board (FIPB) and AirAsia on a plea filed by FIA against the approval accorded to the deal between Tata Sons and AirAsia.

If a business does well, the stock eventually follows! How? Heheheheheheheeh!!

In its letter to the Prime Minister, FIA alleged that the DGCA’s rejection of its observations were based on findings that lacked credible examination. “The conclusions reached by DGCA are substantially if not totally incorrect,” it said.

What the future hold for AAI? Cloudy sky ahead folks! Hahahahahahahah!!

Additionally, Swami informed the court that he has also lodged a plea in the Election Commission of India (ECI) contending that any further approval to the proposed domestic airline will constitute a violation of the model code of conduct.

The leader argued that the matter, for now, is being considered by the ECI, adding that the high court should take up the matter once his plea before the commission is disposed off. The HC re-notified the matter for further hearing on April 23.

A painful & costly waiting game for AAI, folks! How?