Affin Research keeps DiGi (6947), Maxis (6012), TM (4863) top picks

KUALA LUMPUR: Affin Investment Research remains Overweight on the telco sector with DiGi, Maxis and Telekom Malaysia as top picks
“Despite
the relatively expensive sector valuations, we believe that the sector
is likely to continue to outperform the market given its highly
attractive attributes of defensiveness and above market dividend
yields,” it said on Wednesday.
Affin Research believes that at
least until risk aversion dissipates, the market could continue to
favour high yielding quality dividend plays.
“This means that
telco valuations will likely remain lofty and even trading beyond our
fundamentally derived target price (especially in the case for DiGi and
Maxis where FY13 yields are still highly attractive at 6.2% and 5.7%
respectively),” it said.
The research house also said DiGi (BUY; TP: RM4.75) and Maxis (ADD; TP: RM6.76) are our top picks for exposure to celcos. Axiata,
although trading at a discount compared to its peers, remains a REDUCE
(TP: RM5.08) given its below average dividend yield of 3.7%. TM remains
our pick for its fixed line fibre broadband play (BUY; TP: RM6.98).
Affin
Research said there is scope for TM to continue its capital management
initiatives in the interim as its cash pile stood at RM3.7bil as at end
Q2, 2012.