Last post for 2016.
Big telco stake sale in Malaysia
PETALING JAYA: Two foreign shareholders of large stakes in leading Malaysian telecommunications companies (telcos) are exploring the possibility of divesting their stakes, indicating that the industry could be maturing here.
Reports also indicated that these parties might be more keen on investing in higher-growth markets such as Indonesia and Vietnam.
In other parts of Asia, investments by foreign cellular companies (celcos) into Asian telcos had dried up.
Over the past few days, reports had emerged that Norwegian telco, Telenor ASA, might be considering a sale of its stake in Digi.Com Bhd, and Saudi Telecom Co was said to be exploring options to dispose of its indirect stake in Maxis Bhd.
CIMB Research pointed out recently that in the second quarter of the year, the telco industry mobile revenue fell 2.4% quarter-on-quarter due to competition.
However, while these parties may be exploring a divestment of their stakes in Malaysian telcos, the big question is whether there will be takers for the stakes, considering the state of the industry in Malaysia.
Digi is trading at a price earnings (PE) multiple of 23.39 times and offers a yield of 4.26% at its current price of RM4.81, while Maxis’ PE is at 24.40 times, with a yield of 3.25% at its current price of RM6.15, Bloomberg data revealed.
In comparison, Singapore Telecom-munications Ltd is trading at a less demanding PE of 16.3 times and offers a decent yield of 4.41% too.
An added complication is the concern investors would have if an owner like Telenor decides to sell down.
“Without Telenor’s insights, Digi may no longer look as attractive,” pointed out an industry player.