Axiata Rallies, Set to Be Malaysia’s Best Performer

By Chan Tien Hin

March 1 (Bloomberg) -- Axiata Group Bhd., Malaysia’s second-biggest mobile phone operator, rose to a 17-month high after Citigroup Inc. said the company is its “preferred pick” as it wrested market share from its rivals last year.

The stock advanced 4.8 percent to 3.91 ringgit at the midday break in Kuala Lumpur, set for the highest close since Sept. 26, 2008. It’s the best performer on the benchmark FTSE Bursa Malaysia KLCI Index today, and the 28 percent advance this year is also the most for the measure.

Its mobile unit “dominated through 2009” with the highest mobile-phone revenue among Malaysia’s three major operators, Citi said in the report dated Feb. 26. Rivals Maxis Communications Bhd. and Digi.Com Bhd. lost revenue and subscriber market share last year, it said.

Axiata, which also operates in nations such as India, Sri Lanka and Bangladesh, has benefited from growth in emerging markets amid a global economic recovery. In Malaysia, the company contained costs and improved its network to boost margins, Citi said in a separate report last week.

Malaysia emerged from its first recession in a decade last quarter. Gross domestic product increased 4.5 percent in the fourth quarter from a year earlier, after contracting 1.2 percent in the previous three months, the central bank said in a statement on Feb. 24.

Axiata’s users made up 33.9 percent of Malaysia’s mobile- phone subscribers in the fourth quarter, from 32.5 percent a year earlier, Citigroup said. Maxis, the biggest mobile-phone operator in Malaysia by customers, saw its market share fall to 40.2 percent from 41.2 percent, while Digi slid to 25.8 percent from 26.2 percent.

Axiata Chief Executive Officer Jamaludin Ibrahim couldn’t immediately be reached in his office for a comment.

Kuala Lumpur-based Axiata, controlled by Khazanah Nasional Bhd., Malaysia’s state investment company, reported a 558.8 million ringgit ($165 million) profit for the fourth quarter ended Dec. 31, compared with a 515.3 million ringgit loss a year earlier. Revenue jumped 52.7 percent to 3.7 billion ringgit.

--Editor: Linus Chua, Reinie Booysen