Friday 29 Mar 2024
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KUALA LUMPUR (Sept 22): Stocks in the telecommunications sector were down at mid-morning, as market participants engaged in profit-taking, following the recent rally in telco counters.

At 10.59am, Telekom Malaysia Bhd fell 9 sen or 1.3% to RM6.64, with 577,300 shares exchanged.

Maxis Bhd fell 14 sen or 2.1% to RM6.57, with 301,500 shares traded.

DiGi.com Bhd fell 9 sen or 1.6% to RM5.55, and saw some 1.29 million shares exchanged.

Axiata Group Bhd fell 7 sen or 1.1% to RM6.07, with some 2.3 million shares traded.

Hong Leong Investment Bank Bhd (HLIB) analyst, Tan J Young, told theedgemarkets.com the decline today was due to investors taking profit, after the recent rally in telco stocks.

“Following the prime minister’s announcement on the economic measures to address the volatile market, companies in the sector saw their share prices rising. Today, investors are just locking in their gains,” he said, adding that the stocks were declining since yesterday.

Besides that, he said it is still business as usual for these companies, as there were no other news or surprises for the telco sector.

“The competition between the players is still there. It’s all business as usual, as they continue to roll out their 4G LTE network and their network modernisation plans.

“There’s heightened competition now, but that has been prevalent over the past few months,” he said.

On the other hand, Alia Arwina, analyst with RHB Research Institute Sdn Bhd, attributed the correction in telco stocks to rotational play by investors.

“I don’t see any specific reason for the decline, but it could be due to rotational play by investors. Besides that, there has been no new developments for the sector,” she said.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)

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