Maxis to relist Malaysian ops

KUALA LUMPUR: Speculation on the relisting of Maxis Communications Bhd, which was taken private two years ago, persisted yesterday with another research house supporting the view.

“Our industry sources indicate that Maxis may be seeking a relisting, possibly as early as September 2009,” CIMB Research said in a note yesterday.

The research house told clients there was a “high likelihood” that Maxis would be relisted soon, citing funding requirements at its Indian operations, Aircel Ltd, which reportedly needs some US$5 billion (RM17.5 billion) over the next three years.

Macquarie Research last Friday expressed its belief that Maxis’ Malaysian operations “will be listed in Malaysia shortly” and “as early as 2H2009”, also citing the funding needs.

CIMB reckons Maxis will position itself as a “high-dividend yielding stock” and be listed without its operations in India and Indonesia that are still incurring start-up losses.

It estimates that Maxis’ market capitalisation could potentially be between RM32 billion and RM40 billion, making it one of the five largest on Bursa Malaysia. This is higher than Macquarie’s estimate of RM28 billion and RM33 billion for Maxis.

Sime Darby Bhd is currently the country’s largest stock in terms of market capitalisation, which stood at RM41.8 billion yesterday, followed by Malayan Banking Bhd (RM39.6 billion) and Tenaga Nasional Bhd (RM34.2 billion).

Rumours of Maxis’ return to the local bourse gained momentum after OSK Research in a note on June 1 said it gathered that a plan was being mooted to inject Maxis into Astro All Asia Networks plc. “Speculation has it that a major corporate exercise at the highest level is brewing within Astro,” OSK Research had said.

Both the boards of Maxis and Astro last week denied merger talks, describing reports of Maxis being injected into Astro as “unfounded”, “totally without basis” and “highly speculative”.

Astro’s share price continued to rise last week despite the denial, adding 8.5% to RM3.20. Yesterday, it fell four sen to RM3.16, with 2.4 million shares done.

Both CIMB and Macquarie do not see Maxis’ relisting to take place via a merger with Astro.

Investors also chased shares of Measat Global Bhd, another sister company under businessman Ananda Krishnan’s stable, on rumours of its privatisation as well as speculation of Measat being merged with Astro or Maxis.

Measat leapt 64 sen or 52.9% to RM1.85 last Thursday, prompting an “unusual market action” query by the stock exchange and a trading suspension. Yesterday, Measat added six sen to RM1.72 on a volume of 3.4 million shares, after falling 19 sen last Friday.

Meanwhile, Macquarie reckons Maxis’ relisting could cap the upside for both Axiata Group Bhd and DiGi.Com Bhd as institutions are likely to reallocate funds to Maxis. It is ‘neutral’ on Axiata and DiGi with target prices of RM2.15 and RM21.60, respectively.

CIMB, on the other hand, thinks Maxis’ re-emergence may be negative for DiGi, due to its poor trading liquidity, and Telekom Malaysia Bhd (TM), which has the smallest market capitalisation among listed telecommunications operators.

Axiata, it reckons, “should be the least affected” as it offers growth and regional exposure, has a large market capitalisation and high trading liquidity.

CIMB has outperform call on Axiata with a RM2.75 target price. It is neutral on TM (RM2.82 target price) and is underperform on DiGi (RM23 target price) on concerns of slowing profit growth.

At yesterday’s close, Axiata fell three sen to RM2.37, DiGi added 10 sen to RM21.90, while TM rose two sen to RM2.72.