KUALA LUMPUR (May 13): Air Asia X Bhd (AAX) shares fell as much 3 sen or 9.2% today to 29.5 sen, on what may seem like investors’ reaction to its rights issue exercise.

AAX had fixed the ex-date for its renounceable rights issue with free detachable warrants on May 13, 2015 (today), and the entitlement date on May 15, 2015.

An analyst with a local investment bank said the drop in share price could be related to the reaction of some AAX investors, who do not wish to subscribe to the group’s rights issue.

“The drop in share price could be related to the rights issue, as AAX investors who do not wish to subscribe to the rights issue exercise may have disposed the company’s shares,” he told theedgemarkets.com.

To recap, AAX said it would raise RM391 million through a rights issue exercise, priced at 22 sen per rights share, and at an entitlement basis of three rights shares for every four existing AAX shares.

The rights issue also comes with a free warrant for every two rights shares subscribed, with an exercise price of 46 sen.

In an April 30 note, PublicInvest Research maintained its neutral call on AAX, with a target price of 54 sen.

“While the [rights issue] exercise will improve the group’s liquidity, we expect the market is still cautious on its earnings prospects, and the rights issue may deepen its share price performance in the near term, hence we maintain our neutral call and an unchanged target price of 54 sen,” said PublicInvest Research.

At 3.29 pm today, AAX shares were still down by 2 sen or 6.2% and trading at 30.5 sen, with 15.88 million shares traded.