MAHB's share price advances 5% after Maybank raises traffic forecast

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KUALA LUMPUR (April 25): Malaysia Airports Holdings Bhd's (MAHB) share price rose as much as 5.21% in early trade today, after Maybank Investment Bank (IB) Research raised its 2017 passenger traffic growth forecast on the group.

As at 3:47pm today, the counter pared some gains to trade at RM7.50, up 20 sen or 2.74% with 5.67 million shares changing hands. Current share price values MAHB at RM12.44 billion.

In a note to clients on Friday, Maybank IB aviation analyst Mohshin Aziz said he turned more positive on stronger-than-expected traffic growth which “allays fears for yield erosion”.

For the first quarter ended March 31, 2017, MAHB reported its Malaysia passenger traffic grew 10.5% to 23.39 million, from 21.17 million a year ago.

Mohshin said the result exceeded the research firm’s base forecast for a growth of 8%.

“We have raised our 2017 passenger traffic growth forecast for MAHB’s Malaysia operations to 10% (from 8%), to reflect better on the current industry performance. Passenger traffic growth was equally strong on both the domestic and international sectors,” he said.

“We have also heard from industry sources that tourists from China had risen significantly since March 2017. We believe this could be due to the weaker ringgit against major global currencies, making Malaysia a cheap destination to go to.

"Furthermore, the recent Chinese government ban on its citizen to travel to South Korea for leisure purposes might have swayed much traffic into the country,” he added.