expekt
Masuk: 2004-12-04
Kirim: 24
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Magnum needs to regain market share
BY TEE LIN SAY
THERE are only three number forecasting operators (NFOs) in Malaysia. As such, it is not difficult to spot the odd man out. That would be Magnum Corp Bhd, according to most industry observers, particularly if you take into account capital management issues.
For one thing, Magnum has not been generous so far in rewarding its shareholders through distributions. After all, gaming companies are cash-rich, and that is why investors buy the stocks – for their dividend potential.
Yet, Magnum's annual gross dividend of 10 sen in recent years is poor compared with those paid by Berjaya Sports Toto Bhd (BToto) and Tanjong Plc. For financial year 2005, BToto declared gross dividends of 45 sen, while Tanjong gave out 70 sen.
Magnum has been busy picking up quoted securities, apparently in the hope that such investments offer better returns than if the company had left the cash in the banks.
It has been actively buying back its shares – as at last Thursday, it had accumulated 88.66 million treasury shares – and even bought shares of its parent company, Multi-Purpose Holdings Bhd. In April and May this year, 66% subsidiary Magnum 4D Bhd acquired close to 20 million shares in E & O Property Development Bhd.
Magnum is clearly convinced that its shares are undervalued, hence the vigorous implementation of its buyback programme. However, the market does not seem to share that view. Year to date, the stock has fallen by some 20.42% to settle at its current RM1.90.
That probably has to do with a bigger concern about Magnum – its dwindling market share in the NFO business. Over the last two years, it has been losing ground nearly every quarter.
Analysts say this is due to the fact that it has yet to launch its own version of the 4-digit (4D) permutation games, such as Tanjong's I-Box and BToto's I-Perm. However, the management has said it was not interested to do so. According to observers, Magnum instead wants to introduce new games.
Explains one gaming analyst: “Permutation is still 4D. It is not really a new game. It is easy for the authorities to grant the licence (for permutation). If Magnum really wanted to, they could get it.”
Kirim pada 2005-12-25 16:54:21
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