“The company is in the final stage of the disposal. It will happen very soon,” a source said. “Media Prima will recover its investment. No more exposure. No more losses. Clean cut.”
The bleeding Philippine operations, referred to by some as Media Prima’s “Achilles’ heel”, has been a major drag on the group’s bottom line.
Thus far, Media Prima has recognised accumulated losses of RM68.1mil – RM45.3mil in financial year 2008 and RM22.8mil in the first half ended June 2009.
This news has triggered a strong rally in Media today. The other possible reason for the rally is its expected takeover of NSTP, which also rallied strongly today. From the technical perspective, Media appears to have broken above its downtrend line at RM1.60 level. Media (closing at RM1.77 today) has also surpassed its horizontal resistance at RM1.75. Its next resistance is at RM2.00.
Chart: Media's weekly chart as at Oct 14, 2009_4.35pm (Source: Quickcharts)
Based on the bullish breakout, Media is a trading BUY.