According to AmInvestment Bank Research, the eventual merged entity is unlikely to initiate further price cuts that will only erode its bottom line. The Telenor-Axiata entity’s combined US$6bil capital expenditures (capex) could be optimised while procurement synergies could lead to lower overall costs. This, together with the higher market capitalisation of the merged entity also offers an opportunity for Khazanah Nasional Bhd to monetize its 40% equity stake in Axiata, it said. Meanwhile, commenting on Telekom Malaysia Bhd (TM), it noted that TM had demonstrated a surprisingly sharp drop in first quarter operating costs, supported by the group’s transformative Performance Improvement Programme. The research house said it reiterates its “buy” calls for Axiata Group Bhd with a fair value (FV) of RM5.40 and Digi with a FV of RM5.45.

Source: The Star July 05, 2019 00:45 UTC