It quoted an industry source as saying Maxis’ share price was not expected to experience any immediate sharp decline as institutional fund managers were not likely to react to news the way retail investors do.
“If it does come around, the downward trend on the telco giant’s share price would likely trickle downward over the next few days. General market movement would also be the main factor to drive the share price down,” the analyst told TMR, adding that the Aircel issue would not be the sole contributor for any downward revision.
TMR said news of Aircel filing for bankruptcy protection from creditors had resulted in concern as to whether it would impact sentiments in Maxis’ boss Ananda Krishnan’s other businesses, especially in Malaysia.
Maxis, which recently recorded the highest after tax profit in four years for its 2017 financials, saw its share price only dropping one sen to RM5.90 yesterday despite reaching a day’s low of RM5.79.
Maxis, which is majority owned by Ananda, has a market value of RM46.08 billion, according to the report.
Maxis has remained resilient in recording an above average annual growth despite the overall soft market sentiment and challenging operating environment, the report added.
Maxis posted a 10.7% year-on-year jump in net profit to RM559 million for the fourth quarter ended Dec 31, 2017.
Meanwhile, Bloomberg, citing people familiar with the matter, reported that Ananda would likely lose about US$7 billion (RM28 billion) from the Aircel business fallout.
It said Ananda spent about US$800 million to purchase Aircel in 2006 and over the years, Maxis made about US$3.4 billion of shareholder advances to Aircel.
While he had deep pockets, Bloomberg reported, Ananda failed to anticipate how cutthroat India’s telecom market would become. With nearly a dozen players jockeying for market share, call rates in the country plunged to some of the lowest levels worldwide. Competition, it said, had intensified since 2016, when Reliance Jio Infocomm Ltd, owned by India’s richest man, stormed into the market and offered free calls.