Maxis up on MSCI weightage change

  • Business
  • Thursday, 19 Aug 2010

PETALING JAYA: Maxis Bhd, the country’s largest mobile phone operator, was actively traded on news that MSCI Malaysia will change the weightage of Maxis, raising its free float weightage from 0.25 to 0.30. The change is effective Aug 31.

Maxis closed up 14 sen at RM5.43 on volume of 19 million shares.

It will be the only stock to see a change in its free float. However, a few other stocks have small changes in their share capital, and these capital changes have also been adjusted for.

“The largest positive change is to Maxis due to the free float change. Other large caps in general will see a drop in their weightage because Maxis’ has risen,” said a local research head. “There are 40 stocks in MSCI Malaysia.”

There is also talk about a special dividend of up to 20 sen.

“Last year Maxis paid gross dividend of over 70 sen per share. A 20 sen dividend is possible. After all they do have a dividend policy of paying out some 75% of their earnings,” said one dealer.

Last year, Maxis said it planned to pay more than 75% of its annual profit as dividends. For the first quarter ended March 31, Maxis declared a first interim dividend of 8 sen per share.

The dividend payout trend in the last two quarters showed that Maxis could pay a higher dividend this year.

Maxis had also earlier made known its plans to raise RM4.5bil to repay a RM2.5bil bridging loan and to fund capital expenditure.

CIMB Research said this implied that Maxis could fund its dividend payout with its operating cashflow. The research house is estimating a gross dividend per share of 45 sen for Maxis’ financial year ended Dec 31, 2010.

Maxis posted a net profit of RM552mil, or 7.40 sen per share, for the three months ended March 31 from a net loss of RM42mil previously.

Revenue improved to RM2.15bil from RM1.8bil for the period under review, mainly due to higher mobile subscription base.

Maxis is looking to achieve 50% revenue from non-voice business by as early as 2012.

Currently, Maxis’ non-voice revenue, which comes from text messages, mobile broadband, fixed-line broadband and mobile content like games and ringtones, represents about 35% of the total revenue.

The move to grow non-voice business is essential for the company as stiff competition among operators has resulted in lower call rates.

Maxis now has more than 12 million customers.

In a separate development, Maxis has reportedly hired DBS Group Holdings Ltd and Oversea-Chinese Banking Corp for a 10-year loan.

The loan is a US$100mil (RM320mil) term facility.

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