KUALA LUMPUR (Apr 8): Telekom Malaysia Bhd (TM) fell as much as 2.2% in morning trades today after the 2014 Auditor General’s report highlighted that payments made to the telecommunications giant were outside of contract.

According to the audit report, national broadcaster Radio Televisyen Malaysia (RTM) paid RM103.14 million to TM (fundamental: 1; valuation: 1.1) for broadcasting services prior to a contract signed between both parties.

At 11.33am today, TM fell 15 sen or 2% to RM7.45. The top tenth decliner saw trades of some 1.8 million shares. It had earlier fallen to a low of RM7.43.

A bank-backed research analyst told theedgemarkets.com that TM’s decline is not a cause for concern to investors.

“While it is difficult to attribute the findings of the audit report to the drop, we feel that investors are just taking some profit,” he spoke over the telephone.

The research analyst assured TM’s fundamentals are still intact, adding he maintained his “neutral” rating for the stock with target price (TP) of RM7.35.

Another research analyst also concurred saying the decline in TM as a “normal pullback”. He maintained his “hold” call for the stock with TP of RM7.50.

Thus far, TM has fallen through the immediate technical support level of RM7.49, according to Kenanga Research in a note today. TM would see the next support level at RM7.43, while its immediate resistance level stood at RM7.70.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)