Hot Stocks Time.com rises 2%, Telekom down 2% after Time gains contract on submarine cable system

by **Cals** Thu 17 Apr 2014, 01:09

Hot Stocks Time.com rises 2%, Telekom down 2% after Time gains contract on submarine cable system

Business & Markets 2014

Written by Jonathan Gan of theedgemalaysia.com

Wednesday, 16 April 2014 11:45

KUALA LUMPUR (Apr 16): Timedotcom Bhd (Time.com) shares were among the top gainers today following its Bursa announcement yesterday that it is participating in a consortium to build a new submarine cable system linking Asia, Europe and Middle East.

At 11:02 am today, shares of the company rose 9 sen or 2% to RM4.5 with 389,000 shares traded.

But Telekom Malaysia (TM) shares fell 12 sen or 2% to RM5.92 with some 1.6 million shares traded.

Analysts are positive on Time.com’s latest development, with two major broking houses raising their target prices for the counter today.

The Asian Africa Europe-1 Submarine cable system (AAE-1) measuring 25,000km is expected to cost Time.com US$44 million (RM143 million), according to analysts.

RHB Research has maintained its “buy” recommendation on the stock with higher fair value (FV) of RM5.20 per share from the previous RM4.30

Analyst Lim Tee Yang of RHB Research said in a note today that the development was viewed positively as it would give connectivity to most of the major regions.

“We are positive on this as the AAE-1 will complement the upcoming Asia Pacific Gateway (APG) and existing Unity cable, thus raising its regional profile for international bandwidth,” said Lim

Similarly, Hong Leong Investment Bank (HLIB) has raised its target price for the stock to RM4.87 from RM4.41.

“This is a positive development as this strategic asset will further complement in terms of presence and reachability, thus grooming Time.com to be a formidable regional fixed player,” said analyst Tan J Young of HLIB

Tan expects minimal execution risk from the project undertaken by 17 regional telco incumbents including major players like British Telecom, China Unicom and Estisalat.