KUALA LUMPUR (Nov 5): Axiata Group Bhd has decided to cancel its dividend reinvestment scheme (DRS) on the electable portion of its interim dividend due to softer equity markets.

In a filing with Bursa Malaysia today, Axiata said the board of directors has decided, "after careful deliberation, to exercise its right to cancel the application of the DRS".

"In view of the softer equity markets, the board is of the view that a full cash dividend would offer shareholders better value at this point in time," it added.

Accordingly, the entitled shareholders of Axiata will receive the entire interim dividend of 5 sen per share for the financial year ending Dec 31, 2018 in cash on Nov 12.

Axiata said the cancellation will not have any material effect on the group's issued share capital, earnings per share, net assets per share, gearing and the substantial shareholders’ shareholdings.

On Sept 27, Axiata had set the issue price for its shares under its DRS at RM4.26 apiece. This represented a discount of 7.79% to the theoretical ex-dividend price of RM4.62, which was based on the five-day volume weighted average market price up to Sept 26, the last trading day prior to the price-fixing date.

In its Oct 29 issue, The Edge Malaysia weekly had highlighted that while Axiata's shareholders can choose to be rewarded in shares or cash, it is clear that the share option has become redundant as they can buy Axiata shares on the market at a lower price.

Axiata shares closed up 5 sen or 1.46% at RM3.48 today, with 8.31 million shares done, bringing it a market capitalisation of RM31.57 billion.