Hot Stocks Axiata, DiGi, Maxis down after govt announced spectrum redistribution

by **Cals** Sat 30 Jan 2016, 02:26

Hot Stocks

[size=28]Axiata, DiGi, Maxis down after govt announced spectrum redistribution

By Yimie Yong & Billy Toh / theedgemarkets.com | January 29, 2016 : 3:36 PM MYT

KUALA LUMPUR (Jan 29): Axiata Group ([You must be registered and logged in to see this image.] Valuation: 1.70, Fundamental: 1.15) fell 4% while Maxis Bhd ( Valuation: 1.10, Fundamental: 1.15) dropped 9% after the government said it planned to raise cash from telecommunication spectrum redistribution via a bidding process.

The plan forms a part of Malaysia's Budget 2016 revision, which was announced yesterday.

At 2:36pm today, Axiata fell 25 sen to RM5.34 for a market capitalisation of RM47.08 billion. The stock saw some 21 million shares done.

At 2:38pm, Maxis dropped 55 sen to RM5.63 for a market value of RM42.28 billion. The stock saw about 17 million shares changing hands.

Axiata was the ninth most actively traded counter on Bursa Malaysia and also the 10th-largest decliner. Maxis was the second-largest decliner.

DiGi.Com ([You must be registered and logged in to see this image.] Valuation: 1.50, Fundamental: 1.35) Bhd fell nine sen or 2% at 2:40pm for a market value of RM37.27 billion. The stock saw some 12 million shares traded.

CIMB ([You must be registered and logged in to see this image.] Valuation: 1.65, Fundamental: 0.55) Investment Bank Bhd said in a note today the telecommunication sector was the "biggest loser" as existing major players might spend substantially to retain or acquire more spectrum.

According to CIMB, Maxis and Axiata dominate the 900MHz spectrum while the 1800MHz spectrum is evenly distributed among the three major mobile telecommunication network operators.

CIMB analyst Foong Choong Chen said: "This is a negative surprise for the sector, as our recent conversation with the Malaysian Communications and Multimedia Commission (MCMC) suggested that the regulator was quite happy and did not intend to disrupt the good progress made by the existing mobile operators in building out their mobile data networks.

"A spectrum auction is likely to result in the incumbent mobile operators forking out substantial cash to retain or acquire more 900MHz and 1800MHz spectrum."

(Note: The Edge Research's fundamental score reflects a company's profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)
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