Maxis shares up in early trading on renewed potential U Mobile merger plans
KUALA LUMPUR: Maxis Bhd shares rose in early trade following reports of renewed plans for a potential merger with U Mobile Sdn Bhd.
At 10.23am, Maxis shares rose five sen to RM3.56, with 268,300 shares traded.
In a research note today, Hong Leong Investment Bank Bhd said a potential merger would help repair the market by absorbing an aggressive price competitor and creating a two-player market.
"However, if the merger materialises, we believe the near-term implications would be negative given higher capex for 5G, weaker earnings, and dividend pressures for both Maxis and CelcomDigi Bhd," it said.
Therefore, the investment bank maintained an "overweight" call on the telecommunications sector.
According to reports, Maxis and U Mobile are reviving plans to combine the companies in a deal that could create the country's biggest wireless operator by market value.
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