Logo of Phnom Penh Post newspaper Phnom Penh Post - Axiata’s share price weakness ‘may be buying opportunity’

Axiata’s share price weakness ‘may be buying opportunity’

Content image - Phnom Penh Post
A pedestrian uses a smartphone in Jakarta while walking past an advertisement for XL Axiata, one of Indonesia’s top three mobile operators. BAY ISMOYO/AFP

Axiata’s share price weakness ‘may be buying opportunity’

Axiata Group Bhd’s recent share price weakness following the cancellation of its proposed merger with Telenor SA could present a buying opportunity as its regional operations grow more efficient, says Kenanga research.

Axiata’s share price plummeted to a closing low of 4.11 ringgit ($0.98) on September 10.

Kenanga said Axiata’s management remains firm in managing operating costs better, especially direct costs as demonstrated in figures from the first half of this year, which it believes could carry on to future results.

It added that XL’s expansion into the ex-Java market could drive the group’s Indonesian presence while benefiting from improved interconnection and other expenses. In the first half of this year, service revenue grew 15 per cent and earnings before interest, tax, depreciation and amortisation rose 19 per cent.

“We gathered that other players were unable to enter the ex-Java scene due to poorer financial capabilities, which says plenty about XL’s staying power in the fight for market share,” it said.

Meanwhile, the Robi operations in Bangladesh face pressure from new tax rulings but will stay profitable due to growing market share, while Dialog in Sri Lanka may be hampered in fiscal year 2019 due to the terrorist attack but may recover in fiscal year 2020 if consumer spending regains its footing.

Smart in Cambodia is thriving as a market leader while Nepal’s Ncell may still be far away from a resolution to its ongoing capital gains tax dispute with authorities.

As for edotco, Kenanga believes that after the Philippines, other possible market entries could be Thailand and Vietnam. The digital operations are likely making losses but seeking synergistic partnerships to expand their presence, it said.

With regards to a potential future merger, the research house said Axiata’s management remains keen in seeking earnings accretive and yield generating merger opportunities although likely at a much smaller scale.

There has been recent talk of CK Hutchinson eyeing XL Axiata as well as debate over the sensibility for TM and Celecom to join hands, which Kenanga says could translate positively to sentiment.



  • Prince Norodom Ranariddh passes away at 77

    Prince Norodom Ranariddh, the second son of the late King Father Norodom Sihanouk and former First Prime Minister of Cambodia, has passed away in France at the age of 77. “Samdech Krom Preah Norodom Ranariddh has passed away this morning in France just after 9am Paris-time,”

  • Rise in planned flights lifts travel hopes

    Six airlines have applied to resume flights in December, while two others have put in for additional flights and routes, according to State Secretariat of Civil Aviation (SSCA) head Mao Havannall on November 29. These account for 43 new weekly domestic and international flights in December, up 16

  • General’s gun smuggling ring busted

    The Military Police sent six military officers to court on November 22 to face prosecution for possession of 105 illegal rifles and arms smuggling, while investigators say they are still hunting down additional accomplices. Sao Sokha, deputy commander of the Royal Cambodian Armed Forces and commander of

  • Is Cambodia’s travel sector in for another cheerless holiday season?

    The travel and tourism sector was heaving back to life as borders started to reopen, promising a festive vibe for the holidays and New Year. But Omicron and other Covid-related issues are threatening to close the year on a bleak note ‘Seems [like] Covid-19 won’

  • Cambodia, Thailand to discuss border reopening

    Cambodian authorities from provinces along the Cambodia-Thailand border will meet with Thai counterparts to discuss reopening border checkpoints to facilitate travel, transfer of products and cross-border trade between the two countries. Banteay Meanchey provincial deputy governor Ly Sary said on November 22 that the provincial administration

  • Hun Sen: Manet to be candidate for prime minister

    Prime Minister Hun Sen has reaffirmed that his oldest son Hun Manet will be his successor as Prime Minister if he is elected. Speaking during the inauguration of a new sewage treatment facility in Preah Sihanouk province on December 2, Hun Sen said Manet will be