KUALA LUMPUR: Large dividend-paying telecoms stocks like DiGi.Com Bhd, Telekom Malaysia Bhd, Axiata Group Bhd and Maxis Bhd are among today’s most active counters ahead of tomorrow’s Budget 2013.
Investors also opt for a defensive strategy ahead of a renewed speculation of the general election taking place soon, analysts said.
“Whatever goodies announced for Budget 2013, possibly continued tax-breaks for broadband spending, will probably be more of a sentiment boost. Investors are more likely to be picking up these shares for their defensive qualities with rumours of the general election being called in November,” one telecoms analyst said.
He pointed out that DiGi is due to declare another quarterly dividend around this time next month.
At 3.35pm, DiGi rose 21 sen or 4.1% to a new all-time high of RM5.33 on heavy volumes – lifting the benchmark FBM KLCI by a whopping 3.8 points. The FBM KLCI, meanwhile, was up 11.31 points or 0.7% at 1,630.61 points.
Another local analyst agreed: “Telco stocks offer good value and are defensive plays during a volatile market such as now. Consumer and telco stocks tend to benefit from market uncertainties.”
He is also not expecting Budget 2013 goodies to have much impact on the telcos’ earnings.
Telekom Malaysia Bhd was also higher, up 6 sen or 1% to RM6.09, lifting the bellwether index by 0.5 points at 3.35pm.
Axiata Group Bhd, which owns mobile operator Celcom Axiata Bhd in Malaysia, added 5 sen or 0.79% to RM6.39 with over 6.7 million shares done. This lifted the FBM KLCI by 0.79 points mid-afternoon.
Maxis also lifted the FBM KLCI by 0.7 points as it gained 10 sen or 1.47% to RM6.90 with over 3.2 million shares done at 3.35pm.
The rumour on the country’s 13th general election taking place soon is resurfacing in the run-up to tomorrow’s tabling of the Budget 2013 as the Budget is widely expected to be a ‘populist’ proposal that would help put more money into the hands of the lower income group and buoy the general public’s ‘feel good’ sentiments.
Analysts are not surprised that investors are taking a defensive strategy given the steep market sell-off which happened in last general election in 2008.