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.



  • Phnom Penh curfew starts today

    A two-week curfew from 8pm to 5am starts today in Phnom Penh, a day after a sub-decree detailing administrative measures to contain Covid-19 was issued by Prime Minister Hun Sen. “Travelling in Phnom Penh is temporally banned between 8pm and 5am,” said Phnom Penh governor

  • Cambodia on the verge of national tragedy, WHO warns

    The World Health Organisation (WHO) in Cambodia warned that the country had reached another critical point amid a sudden, huge surge in community transmission cases and deaths. “We stand on the brink of a national tragedy because of Covid-19. Despite our best efforts, we are

  • Cambodia gears up for muted New Year festival

    The recent curfew and restrictions imposed in the capital and other Covid-19 hotspots were intended to break the chain of transmission, Ministry of Health spokeswoman Or Vandine said as municipal and provincial authorities issued new directives banning certain activities during the upcoming Khmer New Year

  • Vaccination open to foreigners in Cambodia

    The Ministry of Health on April 8 issued an announcement on Covid-19 vaccination for foreigners residing and working in Cambodia, directing the Ministry of Labour and Vocational Training and local authorities to register them. Health minister Mam Bun Heng, who is also head of the inter-ministerial

  • Covid-19 vaccination now obligatory

    Prime Minister Hun Sen on April 11 issued a sub-decree making Covid-19 vaccination compulsory for individuals unless they have a medical certificate proving they have pre-existing health conditions that prevent them from doing so. «This applies to all members of the armed forces and civil servants

  • Time to Rise by rapper, chapei legend is viral hit with ancient-modern mix

    Kong Nay is known internationally as the master of the chapei dang veng, a traditional Cambodian instrument resembling a long-necked lute or guitar with two nylon strings that he was already playing professionally by the age of 15. Nay is sometimes referred to as the Cambodian