AirAsia X Bhd., the long-haul arm of Asia’s biggest budget carrier, rose as much as 2.4 percent on its first day of trading, the fourth-worst Kuala Lumpur debut in the past year, according to data compiled by Bloomberg.
The airline, which raised 988 million ringgit ($310 million) in its initial public offering, climbed to as high as 1.28 ringgit from an offer price of 1.25 ringgit. The benchmark FTSE Bursa Malaysia KLCI Index rose 0.2 percent. It was the country’s most actively traded stock with more than 100 million shares changing hands.
“We are buying for long term,” said Ang Kok Heng, who bought the stock in the IPO as chief investment officer at Phillip Capital Management Sdn. where he helps manage $428 million. “Those who are in for short-term profits, let them sell it. We are buying today for some clients and will buy more if the stock falls.”
AirAsia X’s share sale last month survived market turmoil brought on by concerns that the U.S. Federal Reserve will reduce stimulus and China’s economic slowdown may deepen. The budget carrier, a spin-off from Tony Fernandes’ AirAsia Bhd., will use IPO proceeds to help finance new aircraft as it fends off rising competition from Singapore Airlines Ltd.’s long-distance budget unit Scoot that started flying last year.
CLIQ Energy Bhd. was the only stock to fall on its debut in Kuala Lumpur in the past 12 months, dropping 24 percent, according to data compiled by Bloomberg. Tune Ins Holdings Bhd., an insurance company also set up by Fernandes, had the third- worst start, rising 0.7 percent on its first day of trade in February, data compiled by Bloomberg show.
AirAsia X traded at 1.26 ringgit as of 10:49 a.m. local time. Parent AirAsia fell 0.6 percent to 3.21 ringgit, paring its gain this year to 17 percent.
AirAsia X, which has a market value of 3 billion ringgit, priced its IPO at 1.25 ringgit per share for both institutions and individuals. The Sepang, Malaysia-based company had marketed shares to institutional investors at 1.15 ringgit to 1.45 ringgit.
Budget airlines in Southeast Asia ordered at least 1,000 new aircraft in the past five years as economic expansion enables more people in countries such as Indonesia, Thailand and Vietnam start flying. Some 15 low-fare carriers started operations in the past decade across Asia-Pacific, the most profitable region worldwide for at least the fourth consecutive year, according to the International Air Transport Association.
With assistance from Vipin V. Nair in Mumbai and Karl Lester M. Yap in Manila. Editors: Frank Longid, Barry Porter. To contact the reporter on this story: Chong Pooi Koon in Kuala Lumpur at firstname.lastname@example.org. To contact the editor responsible for this story: Anand Krishnamoorthy at email@example.com.