Malaysia Airlines (KLSE: MAS) shares plummeted as low as 20% on Monday after a plane travelling to Beijing went missing over the weekend. However, they mostly recovered further into the trading session.
Other markets in the region also suffered as investors digested poor economic data. The Nikkei Index fell 1% on reports that the Japanese economy is growing at a slower pace, while Chinese stocks were lower because of disappointing trade figures.
The missing jet, Malaysia Airlines Flight 370, went missing an hour after takeoff from Kuala Lumpur International Airport. Investigation found that two passengers boarded with stolen passports, leading some to believe that terrorism was involved.
“I’m expecting it to affect consumer sentiment” predicted Daniel Wong, an analyst at Hong Leong Investment Bank. “People will get very wary of Malaysia Airlines’ branding and will likely go for other airlines.”
The carrier has received many awards for its quality and service, but has had difficulties competing with low cost airlines such as AirAsia (KLSE: AIRASIA), the region’s largest. Budget carriers now represent over 50% of commercial air traffic in Southeast Asia.
The Bursa Malaysia ended down 0.56% after Monday’s trading. The Ringgit was seen higher against the U.S. Dollar.
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