KUALA LUMPUR: CIMB Equities Research remains UNDERWEIGHT on the regional telco sector given regulatory uncertainties in Thailand and to a lesser extent Malaysia, and stiff competition in Singapore.
'We are most optimistic on Malaysia which offers growth (via Axiata) and high dividends but will temper our view towards the end of the year when spectrum auction looms. Reflecting the maturity of this sector, dividend yields are soaring,' it said on Thursday, Feb 17.
CIMB Research said it preferred telcos that offer growth or capital management initiatives.
It said its top picks were Axiata and XL Axiata which offered growth, and Telekom Malaysia which should make a generous payout.
Axiata and XL could also surprise on the upside in terms of margins. Key sells are SingTel as it faces multiple headwinds, due to its heavy gearing and StarHub which faces rising competition in fixed broadband and pay TV.
'We are most optimistic on Malaysia which offers growth (via Axiata) and high dividends but will temper our view towards the end of the year when spectrum auction looms. Reflecting the maturity of this sector, dividend yields are soaring,' it said on Thursday, Feb 17.
CIMB Research said it preferred telcos that offer growth or capital management initiatives.
It said its top picks were Axiata and XL Axiata which offered growth, and Telekom Malaysia which should make a generous payout.
Axiata and XL could also surprise on the upside in terms of margins. Key sells are SingTel as it faces multiple headwinds, due to its heavy gearing and StarHub which faces rising competition in fixed broadband and pay TV.
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