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Market Daily Report: Bursa Malaysia Ends Higher In Line With Most Regional Markets

KUALA LUMPUR, Sept 20 (Bernama) -- Bursa Malaysia ended higher on Friday in line with most Asian markets, mirroring gains from Wall Street, where investors welcomed the US Federal Reserve's substantial interest rate cut. The FTSE Bursa Malaysia KLCI (FBM KLCI) rose by 3.17 points, or 0.19 per cent, to 1,668.82 at the close from Thursday's close of 1,665.65. It opened 5.03 points higher at 1,670.68, trading between 1,668.48 and 1,674.04 throughout the session. In the broader market, gainers outpaced decliners 732 to 468, while 465 counters were unchanged, 850 untraded and 32 suspended. Turnover swelled to 4.19 billion units worth RM5.97 billion, from Thursday's 3.99 billion units worth RM4.08 billion. UOB Kay Hian Wealth Advisors head of investment research, Mohd Sedek Jantan, noted the FBM KLCI's gains were led by utilities, logistics, and banking stocks, reflecting improved market sentiment. Additiona
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Axiata Completes Airtel Lanka Acquisition in Strategic Move

Axiata Group Bhd has finalized the acquisition of Airtel Lanka, a wholly-owned subsidiary of India’s Bharti Airtel. The transaction, executed via Axiata’s 83%-owned unit Dialog Axiata, involved the issuance of 952.7 million shares, equating to a 10.355% stake in Dialog’s enlarged share base to Bharti Airtel.

The merger agreement, signed in April, aims to streamline operations in Sri Lanka by combining the resources and infrastructure of Axiata, Dialog, and Bharti Airtel. The consolidation is expected to yield substantial economies of scale, reduce infrastructure duplication, and generate significant synergies in technology and capital expenditure. This, in turn, will enhance high-speed broadband connectivity, voice services, and other value-added offerings while driving cost savings and operational efficiencies.

Market Reaction and Analyst Insights

Despite the strategic benefits, the market response was lukewarm, with Axiata shares closing down 2.31% to RM2.54, valuing the group at RM23.32 billion. Year-to-date, Axiata shares have gained 5.83%.

Analysts have expressed mixed views on the deal. TA Securities raised concerns about potential earnings volatility due to Airtel Lanka’s financial woes, having posted a net loss of RM245.4 million for the 2023 fiscal year. The firm cautioned that Dialog could face significant earnings fluctuations if Airtel Lanka’s performance does not improve as anticipated.

Conversely, Kenanga Investment Bank remains optimistic, suggesting that the earnings drag from Airtel Lanka may be short-lived. The bank anticipates that the merger will fortify Dialog Axiata’s dominant market position in Sri Lanka, expanding its subscriber base to over 22 million.

Strategic Implications

Dialog Axiata, already Sri Lanka’s largest telecommunications provider, is poised to leverage this merger to enhance service offerings and market reach. The combined entity aims to provide superior connectivity and competitive pricing, benefiting consumers through improved telecom services.

The strategic consolidation underscores Axiata’s commitment to reinforcing its market leadership and expanding its footprint in the South Asian telecommunications landscape. As the merged operations stabilize, the long-term prospects for enhanced connectivity and service quality in Sri Lanka look promising.

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