Maxis still attracts interest

PETALING JAYA: A week after its listing on the stock exchange, there remains sustained interest in Maxis Bhd, the country’s leading mobile communications service provider by customer base and revenue.

“There’s still a lot of interest in the company,” said Choo Swee Kee, chief investment officer at TA Investment Management Bhd.

Maxis shares topped the most active counter list yesterday with more than 26.87 million shares changing hands.

Funds that were allocated smaller portions during Maxis’ initial public offering were building up more significant positions while retailers who missed out on the opportunity were also looking to buy on weakness, he said.

“The company enjoys a good perception and those who want to ride on its brand name and good management are looking to nibble,” Choo told StarBiz.

Maxis shares were listed on Bursa Malaysia on Nov 19, opening for a premium of 9% over its institutional price of RM5.

It closed at RM.5.42 that day after hitting a high of RM5.50, and accounted for more than half the total value of shares transacted in the entire market.

On Nov 24, the stock saw some selling pressure, sending shares to a low of RM5.20. However, the price recovered yesterday, adding 10 sen, or 1.92%, to close at RM5.30.

“Looks like bargain-hunting had come earlier than expected,” Pong Teng Siew, head of research at Jupiter Securities said.

“However, I’d say a good time to buy is probably somewhere at the low-end of RM5 ,” he said.

Maxis shares are currently trading at a premium above industry price earnings of 12 times – it is trading at about 17 times, based on financial year 2010 earnings per share estimate.

“While we see strong top-line growth prospects for Maxis from rising data usage, margin pressure and more importantly valuations, which are at the very top end relative to its regional peer group, are key factors that we believe will drag on share price performance,” Macquarie Research said in a note to clients yesterday.

TA’s Choo says the current price was “fair” but certainly not a “bargain”. “I’ll probably wait till the stock goes a little lower first before buying,” he said.

Maxis is not favoured for its growth potential due to the saturated conditions of the mobile phone industry in Malaysia but rather is looked upon as “yield play”.

Maxis has said that it intends to pay out at least 75% of net profits as dividends.

Meanwhile, of the five companies that have issued calls on the counter, two have a “buy” call, two a “hold” call while one has an “underperform” call, according to Bloomberg data.

On Monday, international fund managers welcomed the listing of Maxis, which they said had “stirred their interest” when it became one of the largest public issues in Asia at RM11.2bil.

Maxis’ earnings before interest, taxes, depreciation and amortisation in 2008 amounted to RM4.4bil with revenue coming in at RM8.45bil.