AmInvest Research retains overweight on telcos

Given TM's role as the national broadband provider, the group will likely bear up to half of the NFCP cost, which translates to RM2.2bil over the next five years.

KUALA LUMPUR: AmInvestment Research is retaining its overweight outlook on the telecommunications sector given the multiple synergies from sector consolidation, which will significantly alleviate price competition that has been eroding the sector’s margins over the past three years.

In its report issued on Wednesday, it however lowered its fair value for Telekom Malaysia (TM) to RM3.50 a share (from RM4.25 a share) by lowering discounted cashflow (DCF) terminal growth assumption to 1% from 2%, given the expected escalation in the National Fiberisation and Connectivity Plan (NFCP) driven capex requirements.