The market capitalization of the C&M sector at the end of 2004 was RM81.1 billion, accounting for 11.2% of Bursa Malaysia's total market capitalization of RM722 billion. At the end of 2004, Telekom and Maxis accounted for 5.4% and 3.2% respectively of the total market capitalization in the Malaysian Bursa. Malaysian capital market viz. the stock market or the bond market, remains an important source of financing for both the public and the private sector in 2004.
In the first three quarters of 2004, total net funds raised in the capital market are estimated at RM26.576 billion. Listed C&M companies, which include integrated service provider CASP and Pos Malaysia, had a combined market capitalization of RM81.1 billion at the end of 2004. That's up a whopping 33.2% from a market cap of RM60.9 billion. recorded at the end of 2003.
The C&M sector's market capitalization of RM81.1 billion at the end of 2004 accounted for 11.2% of Bursa Malaysia's total market capitalization of RM722 billion. It is worth noting that Telekom's market capitalization gained a huge margin of RM11.9 billion (43.6%) in 2004 to a total of RM39.2 billion. In terms of the contribution of individual C&M companies to Bursa Malaysia, all public listed C&M companies, except Time and Media Prima, recorded individual increases in market capitalization in 2004.
Telekom's contribution to the total market capitalization of Bursa Malaysia has increased the most - from 4.3% in 2003 to 5.4% at the end of 2004.
MARKET PERFORMANCE
Telekom remained the second heavyweight in Malaysia's top 10 heavyweights, despite a revaluation in other larger-cap stocks, as buying interest in such stocks prevailed throughout 2004. Overseas markets in our list all performed quite well, although the market represented by the Dow Jones Industrial Average (DJIA) gained a more moderate 3.1% in 2004 due to uncertainty about the economic direction related to rising interest rates. Asia Pacific markets outperformed with the Singapore Straits Times Index (STI) the best performer in our list, gaining 17.1% to 2,066.1 points.
The Malaysian market seemed to have held up quite well, with the KLCI showing a 14.3% gain.
FEATURES
Despite the fact that 2005 is expected to be a tough year in light of the global slowdown, oil price uncertainty, slowing Malaysian exports and global rising interest rates, the government expects the Malaysian economy to meet the projected GDP growth of 6 % in 2005. Regarding the revenue growth of the individual companies, DiGi (32.5%) and Maxis (23.7%) had solid growth, while Telekom took a slower pace (13.8%) compared to the same corresponding period of the previous year . Given the overall favorable growth, total revenue in the C&M sector for 2004 is estimated to be in the region of RM24.05 billion on an annual basis.
It is generally noted that the majority of MESDAQ companies operate in the software sector. Only two companies AKN Messaging and OSK Ventures fell in market capitalization in the last quarter of 2004. Of the top 10 companies by market capitalization in the MESDAQ market, three such companies are in the communications and multimedia sector, including Redtone International Bhd, which is an ASP class and Network Service Provider (NSP) licensee under the Communications and Multimedia Act, 1998.
Mobile advertising is a new innovative, advanced and effective way of advertising through mobile communication devices. User adoption of mobile ads continues to improve with the growing number of mobile ads and mobile applications sold worldwide. According to Strand Consult ("How to make money with mobile services"), the mobile platform could very well be the only significant source of new revenue for media companies in the future, with traditional markets declining as more customers move online.
By 2007, online advertising revenue in the Asia-Pacific region is expected to reach $1.62 billion. In the United States, online ads are expected to generate as much as $16.1 billion in revenue in 2008. In the third quarter of 2003, the US online advertising market generated $2.43 billion.
In 2004, IDC predicted double-digit growth in the IT market in the Asia-Pacific region, excluding Japan. With such optimistic numbers, it would be hard to ignore the possibilities of mobile advertising. For example, Coca-Cola is at the forefront of this, by "plugging in" to an event or performance through text message advertising.
With 170 million cell phone users sending 2.5 million text messages or SMS per month in the US, this is a potentially lucrative advertising opportunity for carriers to consider. Nevertheless, the environment of mobile applications and technology is rapidly developing and improving, so mobile advertising may become part of the local advertising battle in the near future.
MALAYSIAN ADEX MONITOR
Going into more detail in the quarter to quarter observation, the adex was highest recorded during the third quarter of 2004 - so far at an impressive RM1.1 billion, an increase of 13.6% over the same period in 2003. This inevitably affected the share of free-to-air television, where in terms of market share it increased from 27% in November 2003 to 30% in the same period 2004. However, in ringgit terms, radio advertising increased from RM137, 7 million to RM153.6 million, while cinema and point of sale advertising rose slightly from RM41.3 million in 2003 to RM41.6 million to November 2004.
Despite a slight contraction in market share for free-to-air TV advertising, revenue from TV advertising rose to an impressive total of RM1.2 billion in November 2004. Radio advertising posted sales of RM153.6 million through November this year; RM152.5 million for the same period in 2003. For observation, in ringgit terms, almost all free-to-air TV stations received an increase in TV advertising revenue of between 8% and 27%.
Advertising revenue for 8TV could be due to a huge advertising hit from the popular TV program “Malaysian Idol”. Radio advertising revenue is largely dominated by AMP radio stations with a combined market share of 73% as of September 2004. Star RFM (formerly known as Radio Rediffusion) has taken over 12% of adex radio's market share, at RM14.7 million as of September this year.
THR radio advertising revenue remained almost the same in terms of ringgit and market share. This is an increase of 23% from the same period last year at R23 million. Both My FM and Mix FM recorded advertising revenue of RM20.1 million and RM18.0 million respectively as of September 2004.
From the period January to November this year, the telcos' TV adex totaled RM75.8 million. In second place is Time, which spent a whopping RM10.1 million on advertising, closely followed by Maxis at RM7.1 million. Celcom spent a total of RM1.2 million while DiGi only spent RM0.6 million on advertising from January to November 2004.
Television medium proved to be a favored way of advertising among the telecommunication companies totaling RM41.4 million from January to November 2004. The other medium used by telecommunication companies is print totaling RM30.1 million TELECOMMUNICATION COMPANIES ADVERTISING ACTIVITY: BY MEDIA.
GLOSSARY
