WILL YOU BUY NOW????
Business & Markets 2013
Written by Kamarul Anwar of theedgemalaysia.com
Thursday, 21 March 2013 11:43
KUALA LUMPUR (Mar 21): Kenanga Research maintains its “overweight” rating on telecommunications industry.
The research house reasoned that should the sector’s players’ stocks hit their troughs, the sector’s dividend yield will be more reasonable at 4.9% versus the current 4.3%.
In a note today, Kenanga’s analyst Cheow Ming Liang said based on the research house’s estimates, Axiata Group Bhd’s shares could see its worst performance at its floor level to RM5.47, DIGI.COM BHD [] could fall by 9.5% to RM4.00, Maxis Bhd could be down by 7.1% to RM6.05 and TELEKOM MALAYSIA BHD [] (TM) could be reduced to RM4.92.
“We believe the (telco) sector could provide excellent buying opportunities or could reach its near-term floor level when the incumbents’ (telco players) EV/forward EBITDA valuations fall to their respective mean levels,” said Cheow.
At 11:03 am, Axiata’s shares were trading flat at RM6.33. DiGi’s counter was unchanged at RM4.42, Maxis’ shares were down by one sen to RM6.50 and TM saw its share price down by one sen to RM5.24.
“Despite a lacklustre price performance for the year to date, the sector’s defensive nature and reasonable dividend yield will still be able to provide investors with the much-needed shelter during the current period of uncertainties,
“The sector’s outlook remains intact, in our view, judging from the incumbents’ FY13 key performance indices and their earnings guidance,” said Cheow.
He also said based on the implied target prices earlier, Axiata could provide a 4.3% dividend yield for FY13. DiGi’s shares could come with a 4.6% dividend yield and TM with a 4% dividend yield. Maxis, meanwhile, will have the biggest dividend yield at 6.6% if it hits its target price of RM6.05.