KUALA LUMPUR: PublicInvest Research has downgraded DiGi to Neutral from Outperform as it views the disposal of DiGi shares by Khazanah as a short-term negative for DiGi’s share price.
“According to Reuters, Khazanah Nasional is selling up to RM293.5mil's worth of shares in DiGi at a price range between RM4.80 and RM4.97 per share,” it said in a note on Wednesday.
The research house said the disposal deal will result in Khazanah ceasing to be a shareholder of DiGi which is controlled by Norway’s Telenor Group.
PublicInvest said the disposal is not surprising as Khazanah’s stake in DiGi is non-strategic.
“In addition, Khazanah is the largest shareholder (39%) in Axiata Group, which is wholly owned Celcom, Malaysia’s second largest mobile telephone operator and DiGi’s competitor,” it said.
The research house said while it likes DiGi for its strong free cash flows and low gearing, it believes any upside may be capped in the near-term due to Khazanah’s disposing of its shares.