Telekom hits record high (4863)

Telekom Malaysia Bhd, the national fixed-line and Internet service
provider, surged to a record as analysts said the stock's dividend
yield is appealing to investors seeking shelter from global volatility.

The
stock surged as much as 5.6 per cent to RM5.84, before paring gains to
RM5.80 at 4:01 p.m. local time. The stock was the biggest gainer on the
FTSE Bursa Malaysia KLCI Index today, which climbed as much as 0.5 per
cent. The MSCI Emerging Markets Index sank 1.6 per cent on concern the
U.S. economy is slowing amid Europe's debt crisis.

"Telekom is
one of our top three picks for the second half of this year for its
defensive quality and high yields," Terence Wong, head of research for
Malaysian equities at CIMB Group Holdings Bhd, said in an interview in
Kuala Lumpur today. "There are more uncertainties coming out from
Europe. Foreigners continue to seek safety and buy up the big-caps that
are doing well."

Kuala Lumpur-based Telekom in February proposed
returning 30 sen per share to stock owners in addition to a dividend of
9.8 sen per share, after full-year profit reached RM1.19 billion, which
beat analysts' estimates of RM677 million, according to data compiled
by Bloomberg.

Telekom has a dividend yield of 3.4 per cent
compared with 3.2 per cent for the MSCI Emerging Markets Index,
according to data compiled by Bloomberg.

KandN Kenanga Holdings
Bhd upgraded Malaysia's telecommunication industry to overweight
yesterday with Telekom as its top pick. An overweight means the
particular sector's total return is expected to exceed 10 per cent over
12 months, according to the brokerage report.

"The current
dividend yield thematic play in the sector could continue to spill over
to the second half given that investors tend to seek decent
dividend-yield stocks during a volatile market," KandN Kenanga said.

Shares of Telekom have rallied 17 per cent this year, compared with the benchmark gauge's 4.8 per cent increase. -- Bloomberg