KUALA LUMPUR (Nov 23): Blue-chip telecommunication stocks were trading lower on Friday, dominating Bursa's top turnover list, as overvalued shares continued to undergo corrections.
Among the biggest telco losers today was Digi.com Bhd, whose shares fell as much as 14 sen or 2.94% in morning trade.
At 3.02 pm, Digi declined 11 sen or 2.3% to RM4.66 with 8.95 million shares exchanging hands.
Digi-CJ warrants also hit the top losers' list, slipping 20 sen or 32.26% to 42 sen.
Inter-Pacific Securities head of research Pong Teng Siew believes that telco stocks at their current price levels are not sustainable and expects the shares to fall further until they reach more realistic levels.
“There was a recent spell where prices were going up, particularly with stocks that earned fairly stable profits and paid out good dividends including the telecommunication stocks. However, I don’t believe that the valuation levels right now are sustainable. They are definitely due to come down to more realistic levels,” Pong explained.
Meanwhile, Axiata Group Bhd also fell 0.8% or 5 sen to RM5.82 with around 10 million shares traded.
A results preview report by RHB Research today said it expects Axiata’s earnings for the third quarter ended Sept 30 to be in-line with expectations but only anticipates a low single digit year-on-year growth.
“While revenue growth prospects look good, correspondingly high earnings growth is a challenge as it remains uncertain how fast margins on data will improve as contributions from data grow. Nonetheless, Axiata’s valuation remains cheaper than domestic peers,” added the research house.
Axiata is set to release its results for the third quarter ended Sept 30 next week.
At 3.02 pm, Maxis Bhd and Telekom Malaysia Bhd were both down 1 sen and 3 sen at RM6.44 and RM5.37 respectively.