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STOCKS NEWS MALAYSIA-Axiata declines on negative news

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Shares in mobile phone operator Axiata Group Bhddropped as much as 2.24 percent after the end of its domesticroaming agreement between its Malaysian unit Celcom and localpeer U Mobile.

"We understand that the loss to Celcom will be to the tuneof 40 million r inggit per quarter, or a full year impact whichis approximately 2.2 percent of Celcom's 2011 revenue," AffinInvestment Bank said in a research note on Thursday.

The loss of this domestic roaming agreement would alsodampen Celcom's revenue growth in the fourth quarter of thisyear, it said.

Adding pressure to Axiata's shares includes the recentsuggestion by several Indian cabinet ministers that mobile phonecarriers in India should fork out a one-off fee for thoseholding spectrum above 4.4 megahertz for the remaining period oftheir 20-year licences.

"If materialised, Axiata's 19.3 percent-owned Idea Cellularwould have to fork out 1.3 billion ringgit ($422.90 million) toretain its spectrum," said Affin, maintaining its 'reduce'rating on the stock with a target price of 5.08 ringgit pershare.

The counter ended the morning session 2.09 percent lower at6.57 ringgit per share, underperforming its peers Maxis Bhd's

0.14 percent rise and Digi.com Bhd's 0.37percent increase. 0620 GMT (Reporting by Yantoultra Ngui in Kuala Lumpur;yantoultra.ngui@thomsonreuters.com; Editing by PrateekChatterjee)($1 = 3.0740 Malaysian ringgit)

Keywords: MARKETS MALAYSIA STOCKSNEWS/AXIATA