Should or Would Government Privatizing MAS? (Aug 2013)

Both of our ex & current Prime Minister already voiced their views regarding this matter. Yesterday, our ex-PM said Government should SELL MAS if it can be run more effectively by private sector. Meanwhile, when asked, our current PM said there was no plan to privatize MAS now because it was on track to its turn around plan under the helm of new management. So?


In fact, this was like a million ringgit question for many speculative investors. Maybe, they or YOU were hoping for the deal to materialize if you bought the shares just recently. Anyway, it won't be as easy as you might think.

  1. MAS is a national carrier. It carries the national flag wherever it goes. (Some more, national day is approaching now)
  2. How much to privatized? Especially for a still loss-making company... Definitely, Government won't get much if MAS being privatized now.

However, everything is possible given the facts below:

  1. National company is just a company anyway. We have just witnessed the privatization of KTM, POS and PROTON few years back.
  2. Government's coffer is more important. You can't keeps on letting the pumping money to save a company. Why not let go the 'vampire' of money?


The score now is 2-2. Anything to add?
* Hint: RHB research puts in a target price of RM0.43 for MAS in its report dated 25th July 2013. It this was the offered price, would you satisfy?



Conclusion:
It depends on whom being asked this question. If posted to share investors, the answer would be YES because you most probably can profit from it (if higher premium was offered). However, the answer might be the opposite if posted to Government.

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