AirAsia shares post biggest drop in 3 years

KUALA LUMPUR, Dec 29 (Reuters): Shares in AirAsia fell 7.8 per cent on Monday, their biggest one-day drop in more than three years after one of its aircraft went missing on its way to Singapore from the Indonesian city of Surabaya.

Analysts said the Sunday incident involving AirAsia's Indonesia unit may cause some travellers to be wary about flying with the AirAsia group, affecting its prospects to improve yields and bolster its profit in the year ahead.

"I was expecting yields to at least maintain on a year-on-year basis in 2015, but now I'm expecting them to decline by up to five per cent," said Daniel Wong, an analyst at Kuala Lumpur-based Hong Leong Investment Bank.

The research house downgraded AirAsia from a "buy" to a "trading sell" on Monday morning.

The Kuala Lumpur-traded shares of AirAsia had fallen 7.8 per cent as of 0320 GMT, their biggest daily drop since September 22, 2011.