Singapore. Short-sellers are targetting AirAsia amid accounting worries at Asia’s biggest budget carrier, with its shares among the most borrowed securities in Southeast Asia in recent weeks, data shows.

Loaned stock for Malaysia’s AirAsia rose to a high of 47 million shares on June 23 from 7 million two weeks prior to that, according to data from financial software company SunGard Astec Analytics.

That means sentiment towards AirAsia’s shares, which slumped by as much as a third since June 9 and wiped off nearly half a billion dollars of the airline’s market value, has worsened, despite AirAsia chief executive Tony Fernandes’ recent assertions that the carrier has a solid balance sheet and business plan.

“We have seen that people borrowed the stock, which thus indicates that there are short-sellers out there taking an increasing interest in AirAsia,” Madalin Prout, senior relationship manager at SunGard Astec Analytics, told Reuters.

Concerns about AirAsia came to the fore after a June 10 report by little known GMT Research said the airline uses related-party transactions with loss-making associate carriers to boost its earnings. Hong Kong-based GMT also said the carrier needed $1.9 billion in funding.

Short-sellers sell borrowed stocks, hoping to profit by buying back them back at a cheaper price and pocketing the difference. Securities lending is seen as a proxy for short- selling.

Borrowing levels of AirAsia’s shares rose to as much as 83 percent of the total securities available for lending, the third highest among the most liquid stocks in Southeast Asia, before easing to 69 percent on June 24. This is still above the 12 percent average borrowing levels for Malaysian and Southeast Asian stocks.

Analysts have cut AirAsia’s 2015 earnings estimates by nearly 6 percent on average since June 10, with 14 out of 22 brokers reducing estimates. The company’s shares are down about 29 percent since June 9.

“We not only view AirAsia’s recent updates on funding plans for associates (through convertible bonds and IPOs) with scepticism, but also argue claims of improving prospects are unvalidated,” HSBC analysts said in a report dated June 22.

HSBC said the performance of AirAsia’s Philippine and Indonesian ventures had to significantly improve to attract any external funding in the near term.

AirAsia did not immediately respond to an email seeking comments on the HSBC report. It has said it expects the Indonesia affiliate to break even and its Philippine business to have returned to profitability by the end of this year.

Additional reporting by Shilpa Murthy

Reuters