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Telekom Malaysia Bhd (TM) (Bursa stock code: 4863) will maintain a high dividend payout ratio of 90% even after a capital repayment, according to group chief executive officer Datuk Zamzamzairani Mohd Isa.

TM has proposed to undertake a RM3.5bil capital repayment whereby its shareholders will receive a cash payment of 98 sen for every share held.

“The proposed capital repayment will not impact our business operations and ability to maintain our dividend policy. It will be funded by the anticipated repayment from TM International Bhd (TMI),” Zamzamzairani told a media briefing to announce the financial results yesterday.

TMI has undertaken to pay RM4bil owed to TM by April 24.

“We decided to return the excess cash to our shareholders after factoring in our future requirement. The balance will be used for our operational expenses,” he added.

Group financial officer Datuk Bazlan Osman said the proposal was subject to shareholders’ approval in an EGM to be convened at a later date.

He said the exercise was expected to be completed in the second quarter or early third quarter.

Bazlan said the lower ebitda was largely due to exceptional charges, such as specific allowance for doubtful debts and revenue adjustment for certain foreign VoIP debtors, employee share option scheme cost, diminution in value of quoted investment, unrealised translation loss on foreign currency borrowings and realisation of foreign exchange reserve on disposal of Societe Des Telecommunications De Guinea S.A.

He said broadband remained the key growth driver with a year-on-year growth of 25.8% and contributed 17% to TM’s overall revenue.

TM continued to win new customers and maintained leadership position in the broadband segments registering 1.6 million customers as at end-2008, a growth of 26.7% from 1.2 million customers in 2007.

To a question, Baslan said the group was expected to spend RM2bil to RM2.3bil in capital expenditure (capex) this year.

He said the budget included its “business as usual” capex and for the high-speed broadband (HSBB) project.

Going forward, Zamzamzairani said TM was confident of maintaining the current level of business with slight revenue growth of 1% to 2.5% in 2009 as announced in its headline key performance indicator on Nov 11.

Commenting on the HSBB, Zamzamzairani said TM was actively undertaking the implementation of the project and expected its first commercial roll-out for wholesale in the second quarter and for retail in the fourth quarter.

TM’s net profit for the fourth quarter ended Dec 31 fell 72% to RM164.8mil from RM592.5mil in the previous corresponding period, despite a RM393.3mil, or 18.7%, rise in revenue.

Its earnings per share (EPS) for the period fell to 4.8 sen from 17.2 sen before.

For the full financial year (FY08), TM reported lower earnings before interest, tax, depreciation and amortisation (ebitda) of RM2.9bil against RM3.2bil in FY07.

Its revenue, however, increased to RM8.67bil from RM8.29bil previously contributed by higher non-voice revenue.

Profit after tax and minority interest (Patami) for FY08 was 73.2% lower at RM229.3mil compared with RM856.7mil in FY07.

On a normalised basis, Patami improved by 64% to RM708.5mil from RM432.2mil previously.

The company also announced a final gross dividend of 14.25 sen per share less tax of 25% amounting to RM382mil.

Meanwhile, Reuters reported yesterday that TMI was looking to raise more than US$1bil in a rights offering in the first half, citing an unnamed source with direct knowledge to the deal.

According to the report, TMI was looking to raise capital to reduce its RM10.45bil debt. It also said that JPMorgan and Goldman Sachs were advising TMI on the fund raising.

A TMI spokesman said nothing had been finalised yet, but the company was on track to announce details of its capital-raising plan in the first quarter.- The Star

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MALAYSIAN investors can purchase directly trade stocks listed in Singapore, Thailand, the Philippines and Indonesia once the proposed Asian trading board starts operation next year.

Bursa Malaysia Bhd’s chief executive officer, Datuk Yusli Mohamed Yusoff, said the multilateral trading gateways was a result of more than one year of groundwork by a working group comprising all the five stock exchanges whose bourse capitalisation size was estimated to be more than US$1 trillion.

Yusli said the Asean stock exchange was primarily an electronic linkages that would allow investors from other Asean countries to buy or sell Asean-listed securities through their local brokers.

“Forging closer cooperation among regional exchanges is crucial for us to remain globally relevant. This will encourage greater intra-Asean trading and an integrated Asean capital market will raise the profile of this region’s securities to the global investment community,” he said.
Yusri was speaking after a memorandum of understanding (MoU) signing ceremony between the five exchanges which was witnessed by Thai Finance Minister, Korn Chatikavani, here today.

Bursa Malaysia, Indonesia Stock Exchange, Philippine Stock Exchange Inc, Singapore Exchange and the Stock Exchange of Thailand (SET) signed the MOU to form an Asean electronic trading link to enhance the competitiveness of theircapital markets.

Yusri said the e-trading link, through one single access point, allows intra-Asean cross border trading and would attract more international funds into Asean.

“The next step after signing of the MOU is to work with technology partner to see how the tradings can be done. Eventually, an investor can invest in another country’s exchange without having to call broker in that country,” he said.

According to him, this was the first time such linkages among separate owners are being introduced in the region, adding that similar and much more advanced concept exist in Europe but involves common ownerships.

Earlier this month, Nongram Wongwanich, chief operation officer of SET, had said the collaboration would start with first bilateral stock trading either between SET and SGX, or SET and the Bursa Malaysia, as these three stock markets have the most readiness in terms of system.

She had said that the second bilateral stock trading would start three months after the first one.

In his speech, Korn said a stronger, integrated and more competitive Asean was necessary to respond to the changing global landscape.

“Offering a single platform is a starting point to achieve our 2015 vision of a more integrated Asean capital market with harmonised rules, regulations and practices”, he said. — BERNAMA

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Macquarie’s top picks are Genting, AMMB Holdings, KNM Group, TM International and Tenaga Nasional.

INVESTORS still see potential upside in Malaysian stocks with the market expected to strengthen in 2009, Macquarie Research says.

The research house, which spent a week marketing in Malaysia, Singapore and Hong Kong, said investor demand was surprisingly good.

“The main questions that arose revolved around what bombed stocks should be bought.

“Additionally, investors were also wondering if the current strength in plantations should be bought or sold,” it said in a research note.
Macquarie said most investors still thought of Malaysia as low beta, where risks and returns are low. They were also surprised that one can make money in the country and outperform regional markets in bear rallies.

This in itself probably led investors to rethink their positioning if they expect a rally in the second and third quarters of 2009.

“We recommend investors move out of cash into equities in first quarter because we expect a bear market rally this year,” the research house said.

Macquarie’s top picks are Genting Bhd, AMMB Holdings, KNM Group, TM International and Tenaga Nasional Bhd.

Elaborating on the stock choices, it said TM International was chosen due to its cheap valuation and growth. “Most investors felt they would wait till the potential cash call is completed,” the research house said.

It said TNB was quite topical in the second half of the week after the government adjusted tariffs in favour of the company.

The main positive is that the regulatory regime continues to demonstrate favour for Tenaga and the introduction of a tariff formula is now more likely than in recent history.

“The main pushback was that investors wanted to wait for further clarity on the regulatory front,” Macquarie said.

As for Genting, the stock has been forgotten since the third and fourth quarters of 2008, and investors sat up when they realised how cheap it is – excluding the market value of its Singapore subsidiary.

The main concern for Genting is that a number of investors did not believe Sentosa would be a success because they compared it with Macau and Las Vegas.

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