This article first appeared in The Edge Financial Daily on February 5, 2020

KUALA LUMPUR: The heavy selldown on AirAsia Group Bhd wiped out some RM1.37 billion of market capitalisation since last Tuesday.

AirAsia’s share price slipped 13 sen or 10.16% to RM1.15 yesterday, giving it a market capitalisation of RM3.84 billion. It was the lowest close since August 2015.

The selling intensified as reflected in the surge in trading volume to 134.84 million shares, more than double Monday’s volume of over 57 million shares, and over 14 times its 200-day average.

AirAsia’s shares opened lower for the second consecutive day, before drifting lower as selling pressure persisted throughout the trading period.

In the past two trading days, the low-cost carrier’s share price has tumbled 19.5% or 28 sen.

Despite the rebound on Bursa Malaysia, the uncertainties arise from the bribery allegations against its two executives and the rising death toll on the Wuhan virus outbreak have kept the low-cost carrier under heavy selling pressure.

Last weekend, news broke that Airbus SE secured lucrative deals to sell its aircraft to AirAsia and AirAsia X Bhd in 2005-2014 by bribing two “key decision-makers” at the budget carriers in the form of a US$50 million sponsorship for a sports team owned by the two executives.

The Airbus scandal added to downward pressure on the counter since last week, which arose from concerns over the impact of the Wuhan virus outbreak towards its business.

AirAsia has at least 14 flight destinations in China, including the Wuhan city where the virus originated. The group has already suspended certain flights to the city.

The selling did not dry up after Tan Sri Tony Fernandes, AirAsia chief executive officer, and Datuk Kamarudin Meranun, who was executive chairman, relinquished their executive roles as AirAsia and Malaysian authorities looked into the allegation.

AirAsia said Fernandes was re-designated non-executive director, while Kamarudin was re-designated non-executive chairman. They remain as advisors in the company, it added.

Collectively, the duo, who are also among the co-founders of AirAsia, collectively own just over 32% in the company.

Meanwhile, AirAsia’s sister company, AirAsia X, fell to its all-time low yesterday. The counter fell half a sen to close at 11.5 sen, giving it a market capitalisation of RM477.04 million.