KUALA LUMPUR, July 29 (Bernama) -- Bursa Malaysia rebounded to close higher on Wednesday on selective buying of defensive stocks after a volatile trading session. IPPFA Sdn Bhd director of investment strategy and country economist Mohd Sedek Jantan said consumer products and services stocks lifted the key index higher, overcoming lingering geopolitical concerns. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) rose 3.08 points to 1,715.56 from yesterday’s close of 1,712.48. The benchmark index, which opened 1.91 points higher at 1,714.39, moved between 1,710.79 and 1,720.59 during the day’s trading. In the broader market, gainers outstripped decliners 550 to 476, while 612 counters were unchanged, 1,129 untraded, and 48 suspended. Turnover rose to 2.96 billion units valued at RM2.48 billion from 2.94 billion units valued at RM2.56 billion on Tuesday.
Two telco giants—TIME dotCom and Maxis—may reward investors with special dividends in FY2025, driven by lower capital expenditure needs and a more disciplined approach to balance sheet optimisation.
Key Highlights
1. Dividend Prospects Brighten for TIME and Maxis
TIME dotCom (KL: TIMECOM) and Maxis (KL: MAXIS) are expected to maintain or improve their dividend profiles in FY2025.
Lower capex intensity and a renewed focus on capital efficiency are paving the way for potential special dividend distributions.
Neutral sector rating but views fixed-line operators like TIME dotCom more favorably, as they are insulated from the near-term volatility tied to mobile 5G network policy shifts.
2. 5G Dual Network Transition: A Sector Overhang
The eventual alignment of mobile network operators (MNOs) to either Digital Nasional Berhad (DNB) or the upcoming Second Network (NW2) will heavily influence:
Future earnings
Capital expenditure trajectories
Dividend capabilities
Until there is more clarity, mobile operators are navigating cautiously, particularly with regard to long-term infrastructure commitments.
3. U Mobile: Leading the Second 5G Network Rollout
U Mobile Sdn Bhd has officially exited DNB and begun deploying the second 5G network:
Huawei is handling Peninsular Malaysia.
ZTE is responsible for East Malaysia (Sabah and Sarawak).
The rollout is being supported by RM4 billion in financing, with CIMB Bank as loan coordinator.
Target: 80% 5G coverage of populated areas by H2 2026.
This includes 4,000–4,500 5G sites by next year.
7,000 total sites planned, with 400 indoor building coverage locations over 2–3 years.
4. U Mobile’s Investment Pressure vs. Revenue Momentum
According to CIMB Securities, U Mobile may incur significant near-term losses due to heavy capex (~RM3 billion over the rollout period).
However, revenue grew 3.4% YoY in FY2024, outperforming peers:
Driven by strong postpaid take-up
Expansion into Sabah and Sarawak
Introduction of competitive product offerings
Analyst Takeaway
While uncertainties remain around the final configuration of Malaysia’s dual 5G infrastructure, investors looking for dividend plays may want to watch TIME and Maxis closely. These companies could offer income stability in a sector undergoing transition.
U Mobile’s aggressive push into 5G positions it for long-term growth, albeit at the cost of near-term profitability. The broader industry may see divergence between asset-light, dividend-yielding telcos and high-growth, capex-intensive challengers.
Investment Implication:
For dividend-focused investors, fixed-line telcos with strong free cash flow (like TIME dotCom) may be preferable amid 5G rollout volatility. Meanwhile, Maxis’s track record and balance sheet flexibility could support continued shareholder returns despite sector noise.
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