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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 Shares Extend Decline as Apex Securities Flags Trouble from Bangladesh Unrest

 

Shares in Axiata Group Bhd (KL) extended their decline on Thursday, nearly erasing this year’s gains amid concerns over the impact of civil unrest in Bangladesh on the group's key subsidiary.

Axiata shares fell to RM2.42, their lowest since January 4. The stock ended the day at RM2.43, down six sen or 2.4% from the previous day, giving the company a market capitalisation of RM22.31 billion on Bursa Malaysia.

Apex Securities cut its target price for Axiata to RM2.55 from RM2.94, highlighting rising macroeconomic risks in the frontier market and weaker investor sentiment.

Escalating anti-government protests in Bangladesh are expected to affect Axiata’s subsidiary, Robi Axiata PLC, which relies heavily on the prepaid mobile business. Robi is the second largest mobile network operator in Bangladesh and contributed 18% of Axiata’s operating profit.

Shares in Axiata have declined for the fourth consecutive day, losing more than 13% since the start of June. The unrest in Bangladesh, initially led by university students demanding changes in the quota-based system for government jobs, has intensified after nearly 200 deaths. The Bangladeshi government has responded by closing educational institutions, shutting down mobile internet, and imposing curfews.

Axiata's exposure to Bangladesh includes its 61% ownership in Robi and its tower assets through 63%-owned Edotco. However, Apex noted that Edotco would experience minimal impact due to the security provided by long-term contracts, which ensure consistent revenue.

Apex is trimming its net profit forecast for Axiata by 3.7% for the financial year ending December 31, 2024, “while awaiting further clarification.”

Additionally, Axiata faces geopolitical, macroeconomic, and regulatory risks, as well as challenges from a strengthening US dollar and high interest rates, Apex noted.

Key Takeaways:

  • Axiata shares dropped to RM2.42, the lowest since January 4, closing at RM2.43.
  • Apex Securities cut Axiata’s target price to RM2.55 from RM2.94.
  • Escalating protests in Bangladesh are expected to impact Axiata’s subsidiary, Robi.
  • Robi contributes 18% of Axiata’s operating profit.
  • Shares have declined for four consecutive days, losing over 13% since early June.
  • Axiata’s exposure to Bangladesh includes 61% ownership in Robi and 63%-owned Edotco.
  • Minimal impact is expected on Edotco due to long-term contracts.
  • Apex trimmed Axiata’s net profit forecast for FY2024 by 3.7%.
  • Axiata faces additional risks from geopolitical, macroeconomic, regulatory issues, a strong US dollar, and high interest rates.
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