KUALA LUMPUR, Oct 1, 2007 (AFP) – Telecommunications giant Telekom Malaysia on Monday saw its share price jump by 11.3 percent in morning trade after the company announced a plan to split its mobile and fixed-line business. At 11:45 am (0345 GMT), Telekom Malaysia shares rose 1.10 ringgit to 10.80 (3.18 dollars) on the Kuala Lumpur Stock Exchange.
The stock had been suspended from trading since Thursday, ahead of the announcement of the proposed demerger plan.
Local brokerage Kenanga Investment Bank said Monday it had upgraded its recommendation on Telekom to “buy”, with a target price of 11.30 ringgit.
“We are positive on the demerger exercise as it enables the potential realisation of the valuation for Telekom Malaysia,” it said.
Prime Minister Abdullah Ahmad Badawi, who is also the finance minister over the weekend backed the plan to split Telekom Malaysia’s assets.
Telekom Malaysia on Friday announced it will revamp its operations and split its mobile and fixed-line businesses into two separate entities listed on the local bourse.
Under the plan, TM International Sdn Bhd will take over Telekom’s domestic mobile operators and non-Malaysian businesses. It will seek a listing on Bursa Malaysi