Business

Friday November 20, 2009

Maxis opens first-day trade with 9% premium

By YVONNE TAN


KUALA LUMPUR: Maxis Bhd flexed its muscle in its debut on Bursa Malaysia yesterday as the stock dominated trading activity while fetching a premium most people expected.

The stock opened with a 9% premium over the indicative price of RM5 but closed 8.4% higher for the day at RM5.42 a share.

Maxis’ shares accounted for 61% of the total value of shares traded, while its trading volume hit 3.06 million shares.

“There was obvious pent-up demand. Some funds may have been building positions because they didn’t get sufficient allocations earlier,” said Jupiter Securities head of research Pong Teng Siew.

From left: Maxis chairman Raja Tan Sri Arshad Raja Tun Uda, Sandip projections to Das, Datuk Seri Nazir Razak and Finance Minister II Datuk Seri Ahmad Husni Hanadzlah at the listing ceremony.

“The opening price (RM5.46) was very much within expectations,” he added.

Pong expects Maxis’ price to dip or at the least remain sluggish for a while as “people may be tempted to sell”. “However, prices should climb gradually over the next six months as funds, especially those looking for ‘yield stocks’, re-adjust and re-allocate their portfolios,” he said.

Based on its closing price of RM5.42 yesterday, Maxis’ market capitalisation is RM40.6bil, making it the fourth-largest company on the stock exchange and the third-biggest listed phone company in South-East Asia, according to Bloomberg data.

Speaking after the listing of the securities yesterday, Maxis chief executive Sandip Das said the company hoped to maintain its earnings before interest, tax, depreciation and amortisation (ebitda) margin above 50%, moving forward.

Maxis’s ebitda margin declined to 51% in the six months ended June 30 from 54% a year earlier.

“Despite (mobile) tariffs dropping by 30% over the past few years, our ebitda margin has stayed above 50% and we hope to be able to maintain this going forward,” he said.

CIMB group chief executive Datuk Seri Nazir Razak said the process of allocating Maxis shares to institutional funds included vigorous assessments of quality and loyalty.

“Some people are going to get low allocations and that is normal. I don’t see why they should turn down the allocations,” Nazir said when asked to comment on the view that the share allocations for some quarters could have been too small.

CIMB Investment Bank was the principal adviser for the initial public offering (IPO).

It was reported recently that OSK Investment Bank Bhd had rejected an allocation of 1.5 million Maxis shares, given that it was too small compared with what the company had applied for.

“Of course, there will be disappointment. It’s great that people really wanted these shares – it’s a reflection of the quality (of Maxis),” Nazir said.

“Ultimately, the objective of the deal in terms of the whole IPO itself – to get 30% quality foreign investors – was achieved.

“For Malaysia, the IPO has brought back quality institutional investors for the first time, or those that left the country some time ago – that is a tremendous achievement,” he added.


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