KUALA LUMPUR (June 16): The Employees Provident Fund (EPF) has been selling its shares in leading telecommunication groups Axiata Group Bhd, Maxis Bhd and Digi.com Bhd amid uncertainties surrounding the 5G rollout in Malaysia.

A cumulative 42.64 million shares in the three telcos were divested by the provident fund over the past six months — 21.34 million units in Digi, 16.2 million units in Axiata and 5.1 million units in Maxis.

Following the disposal, EPF’s stake in Digi slipped to 14.95% (comprising 1.16 billion shares) as of June 13, compared with 15.23% (1.18 billion shares) as of Dec 31 last year.

EPF also trimmed its shareholding in Axiata to 16.93% (1.55 billion shares) as of June 10, from 17.11% (1.57 billion shares) on Jan 14.

As for Maxis, the fund's direct interest went down to 11.93% (933.95 million shares) as of June 13, from 11.99% (938.57 million shares) as at end December last year

EPF’s indirect stake in Maxis, meanwhile, dropped to 0.036% (2.81 million shares) from 0.042% (3.29 million shares) during the period after it sold 474,400 indirect Maxis shares.

In March, the government announced its decision to retain the single wholesale network (SWN) — Digital Nasional  Bhd (DNB) — for the 5G rollout in Malaysia.

"There is still no certainty that the four big telcos (Celcom, Maxis, Digi and Umobile) would ink 5G wholesale agreements or acquire individual stakes in DNB by the stipulated end-June deadline,” noted RHB Research analyst Jeffrey Tan in a  report last Friday (June 10).

Tan said the key areas of discontent are on the prohibitive wholesale pricing structure (10-year agreement), the ability to “influence” decision-making and justify their investments without a majority stake in DNB.

Tan, who has a “neutral” call on the sector, said “the stalemate on the SWN continues to be a key sector overhang, with Malaysian telcos being the worst performers among the ASEAN-4 telcos year to date.”

For individual stocks, Tan has a "neutral" recommendation for Digi with a target price of RM4.10, while he has also issued a “neutral” call for Maxis, with a target price of RM3.98.

Tan had a “buy” recommendation for Axiata, with a target price of RM4.08.

On Thursday, Digi, Axiata and Maxis all closed higher.

Digi closed at RM3.25, up three sen or 0.93%, valuing the group at RM25.27 billion. The stock has fallen 20% from RM4.07 at the beginning of the year.

Axiata settled three sen or 1.09% higher at RM2.79, with a market value of RM25.6 billion. Year to date, the stock has lost 28% from RM3.88.

Maxis' share price advanced four sen or 1.23% to close at RM3.29, rebounding from its all-time low of RM3.25 on Wednesday. Since the beginning of the year, the share price has depreciated 29% from RM4.60. At RM3.29, it has a market capitalisation of RM25.75 billion.