Remember the LORD for it is he who gives you the ability to produce wealth and so confirms his covenant... Deut. 8:18

Tuesday, March 30, 2010

Axiata: XL stake sale to pay for dividend

Axiata Group Bhd, Malaysia’s second-best performing index stock this year, may use proceeds from selling a 20 per cent stake in Indonesia’s PT XL Axiata to pay a dividend and repay debt, Chief Executive Officer Datuk Jamaludin Ibrahim said in an interview in Kuala Lumpur today.

It may also sell between RM1 billion and RM1.5 billion in Islamic bonds to refinance debt, he said. - Bloomberg

I'm buying in more of Axiata (for near future maiden dvd, regional telco play, analyst re-rating) and TM (potential future growth earnings, dvd of 11 sen soon..?). Both are fairly valued and not really expensive considering DiGi and Maxis are priced at PER 17 and PER 20 respectively. Buy only for the really long term if you're cash loaded.

Why I like mobile telco..?
1)- not almost anyone has a house or can buy a house, but almost everyone has a mobile cellphone in their pocket or can afford to buy one. 2)- cellphones are becoming indispensible for social communication or as a communication tool: you wouldn't think of leaving home without it.
Why I like TM...?
1)- it's pure monopoly in the ground/fixed line business. 2)- it's irreplaceable in business communication as most businesses still carry a ground line for voice/fax transmission. 3)- I think it's still cheaper to chat using ground line than mobile line (apart from VOIP, Skype etc) so many aunties/ grandmas are still keeping their TM phone at home. 4)- Future growth earnings albeit slowly as an alternative to pay-TV Astro etc as HSBB becomes reality.

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