Monday, July 20, 2009

Astro, Another Windfall After TM

The trading of Astro stock was halted in morning session on 20 July 2009 to pave the way of making announcement. Announcement was made regarding the plan of spin off their subsidiaries in India and Indonesia which not showing good performance. By spinning of both subsidiaries, Astro will no longer take the burden thus improve the company’s efficiency.

As a result of restructuring, Astro will make a capital return as much as RM1.00 per share to their shareholders. Therefore, it is a windfall for shareholders.

OSK Research recommended buy for Astro where the target price is RM4.20.

The price was trading lower after suspension. It was closed at RM3.44 compare to RM3.62 before suspension. Since it was discounted at RM0.20, from my point of view it is good to buy. Investors will gain from the windfall as well as price appreciation.


- Sabri Jalil

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