MAS & Maybank Bellylanding?
By Syed Akbar Ali
MAS stands to lose RM3bil in hedging costs
PETALING JAYA: Malaysia Airlines (MAS) stands to chalk up close to RM3bil in hedging costs over the next two years. . .
An analyst estimated that MAS was currently sitting on a collective paper loss of around RM2.8bil for financial year 2009 and 2010 as a result of its hedging activities.
MAS has hedged 64% of its fuel requirements for financial year (FY) ending Dec 31 at US$100 per barrel and 40% of FY10 at US$95 per barrel while crude oil is hovering around US$40 per barrel. The analyst estimates MAS using up to 16 million barrels of crude oil per year.
The national carrier does not book any losses as it does not adopt the mark-to-market practice, which essentially means assigning a value to a position held in a financial instrument based on current market price.
