Expect significant new tariffs on Chinese imports and moderate levies on goods from other nations , as President-elect Donald Trump rolls out his protectionist agenda. However, with his preference for chaotic policymaking and sudden shifts , there’s uncertainty on how soon these import taxes will actually hit. Dubbed “ Tariff Man ,” Trump aims to use tariffs both strategically and tactically . He’s mentioned taxing all Chinese goods up to 60% and potentially setting 10%-20% tariffs on imports globally , but details on these plans remain vague . Key players within Trump’s team are divided: Robert Lighthizer , a staunch tariff advocate, sees permanent duties as crucial to balance US trade , while others, like billionaires John Paulson and Scott Bessent , view tariffs as temporary leverage. Trump’s previous administration had mixed feelings, especially on national security-related trade limits , which he sometimes dismissed, favoring an “open for business” approach. High-profile busin
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.
Comments
Post a Comment