Maxis, Axiata among top gainers with EPF boost and spectrum reallocation advance talks

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KUALA LUMPUR (July 4): Advanced discussion on the impending implementation of the reallocation of spectrum by the telecommunication players by July 1, 2017 saw increased activity in counters like Maxis Bhd and Axiata Group Bhd today.

At 12.30 p.m., Axiata grew 10 sen or 1.81% to RM5.61, with 1.8 million shares traded, for a market capitalisation of RM49.3 billion.

At the same time, Maxis expanded 12 sen or 2.02% to RM6.07, with 1.3 million shares transacted, valuing it at RM45.58 billion.

The active trades were further boosted by Employees Provident Fund (EPF)’s raised shareholdings in Maxis and Axiata to 7.86% and 14.69% respectively.

The increase in stake today showed EPF’s acquisition of 300,000 shares on June 29, 2016 for Maxis, and 459,200 shares in Axiata on June 27, 2016.

According to Maxis' annual report 2015, EPF owned 555.79 million direct shares or 7.4% stake as at Feb 15, 2016.

It is the third largest shareholder in Maxis, after BGSM Equity Holdings Sdn Bhd at 64.91% and AmanahRaya Trustees Bhd (8.26%), as at Feb 15, 2016.

Whereas Axiata, which operates the Celcom network, revealed EPF’s equity to be 1.26 billion shares or 14.39% as at March 31, 2016, making it second to Finance Ministry’s Khazanah Nasional Bhd, which owned 3.37 billion shares or 38.21% stake.

Meanwhile, MIDF Research in a June 30 note, said it learnt the Malaysian Communications and Multimedia Commission (MCMC) was in advance stages of discussion with four main telcos, namely Digi.Com Bhd, Maxis, Celcom Axiata Bhd and U Mobile Sdn Bhd, relating to the fee for the reallocated spectrum.

“Recall that in February 2016, MCMC outlined the plans to reallocate the 900Mhz and 1,800Mhz frequency bands among the four telecoms operators, which will be implemented by July 1, 2017,” it said.

MIDF Research pointed out that MCMC might consider fee structures such as pure upfront payment, upfront payment with a recurring annual payment, or a lump sum upfront with annual fees.

However, it views upfront payment with a recurring annual payment as the most likely structure that would evenly spread out the cost of spectrum over a longer period of time.

Thus, there would not be a sudden surge in capital expenditure for the telco operators that are involved.

MIDF Research maintained a “neutral” call on the telecommuncation sector, pending MCMC’s announcement on the spectrum fee and fee structure.