MAXIS or AXIATA? .... AXIATA or MAXIS?

Relaxing with Degas


I am at a dilemma. Since the announcement of the relisting of the telco giant MAXIS, I have been thinking hard about acquiring some of its shares. How would I fund this purchase? As most of my liquidity has gone into bonds and the likes, I was thinking of restructuring/readjusting my portfolio especially the plantation stocks which have been in the doldrums for over eighteen months!

I have been doing some homework on MAXIS which will be relisted before end of 2009. The latest that I heard the IPO would be between RM4.80-5.60, it is just a speculation based on the computation of other telcos' prices on the market as the book-building exercise is still going on. MAXIS will apparently pay 85% of its income as dividends, it has more than 40% share of mobile phone business in Malaysia, it is a well managed and innovative organisation on the negative side it will be relisted minus its more lucrative overseas operations. Notwithstanding the negative aspects, this stock, to me is going to perform like it did before the delisting about two years ago.

On the other hand AXIATA, formerly TM International is not to be outdone. It has a great deal of potential growth due to its significant interests in the mobile telecommunication business in India and Indonesia apart from other countries such as Sri Lanka, Singapore, Iran and Cambodia. At the moment there is a minor selloff going on at the market and the price which has been gradually appreciating over the last six months has currently reverted to that of last July 2009.

The price is very attractive at this point to me. I am not market savvy at all but it looks to me the disposal of a substantial amount of AXIATA shares by EPF, announced on 21 October might have something to do with this depreciation. EPF it seems is set to acquire MAXIS shares at RM5.60, as one of the anchor institutional investors. So do I follow the crowd or do I follow my gut's instinct of acquiring the battered down AXIATA stock? I am at the fork of a road.

The other alternative is just go headlong and get those AXIATA shares and sell off my ASN2 and buy those gold MAXIS units. ASN2 has been doing well lately due to the rising FBM KLCI . This way I will get both these bluechips.... otherwise I will have to toss a coin.