Axiata extends gains, market talk of capital management exercise (6888)

KUALA LUMPUR: Shares of Axiata Group Bhd advanced to a high of RM6.08 on Wednesday while market talk was that it might embark on a capital management exercise.

At 10.48am, it was up two sen to RM6.02. There were 6.0 million shares done at prices ranging from RM6 to RM6.08. On Tuesday, it rose 16 sen to close at RM6 but off the all-time high of RM6.23.

The FBM KLCI was up 2.6 points to 1,641.75. Turnover was 397.43 million shares valued at RM301.27mil. There were 264 gainers, 226 losers and 303 counters unchanged.

OSK Research said there was market talk the group may embark on a capital management exercise.

"We gather from our source that Axiata may unveil a plan to optimise its gearing position as part of its capital management roadmap. This could potentially include a bond issuance to ensure that the group's longer-term capital needs are taken care off," it said.

OSK Research said Axiata was trading at 16.4 times FY13 EPS and 6.2 times FY13 EV/EBITDA which it deemed as attractive but not compelling when viewed against the risks that some of its operating companies face overseas.

"Key re-rating catalysts are: (i) stronger than expected earnings (ii) special dividends and (iii) improved data traction in Indonesia. Axiata's latest foreign shareholding level stood at an estimated 27%," it said.