Shazalli can smoothen path for possible Axiata-TM remerger: AmBank Research

PETALING JAYA: AmBank Research believes the appointment of Axiata Group Bhd’s Datuk Seri Mohammed Shazalli Ramly as the new CEO of Telekom Malaysia Bhd (TM) could ease the possible consolidation of Axiata with TM.

“As Shazalli was formerly with the Axiata group, the changes at top management ease the path to a possible consolidation with TM,” the report read.

The research house said given the fact that Axiata was formerly a part of TM and demerged in 2008, it opines that the possible remerger would only be a reintroduction for the bulk of the two companies’ employees and leadership, and could significantly reduce the usual management dysfunctions arising from a textbook merger case.

Shazalli, who is currently the CEO and corporate executive vice president of Axiata Group, will step into his new role on May 1, following the retirement of outgoing CEO Tan Sri Zamzamzairani Mohd Isa on April 30.

The company, which maintained a “buy” call rating on TM’s stake, also said the driving factors for the potential reintegration also stems from TM’s own convergence drive amid a slowdown in the sector’s revenues compounded by the difficulties in monetising rapidly increasing mobile data demand.

TM shares closed six sen lower at RM 6.36 yesterday, while Axiata shares fell one sen to RM5.06.