This article first appeared in The Edge Financial Daily on May 31, 2018 - June 6, 2018

KUALA LUMPUR: Shares in pay-television provider Astro Malaysia Holdings Bhd closed at an all-time low yesterday at RM1.36, as the market reacted to news that 41 of 64 Fifa World Cup 2018 matches will be aired for free on RTM. In Malaysia, the pay TV broadcasting rights are held by Astro.

The broad market sell-off didn’t help matters amid concerns over the political crisis in Italy and renewed US-China trade war fears. Malaysian shares fell 3.18% to their lowest close since December 2017, as the government cancels major projects including the Kuala Lumpur-Singapore high-speed rail and the third mass rapid transit line projects.

Astro shares closed 11 sen or 7.48% lower at RM1.36, with a market capitalisation of RM7.09 billion. A total of 7.79 million shares changed hands. Year-to-date, the stock has fallen 47% from RM2.59 on Jan 2.

AmInvestment Bank analyst Lavis Chong told The Edge Financial Daily that yesterday’s announcement by Communications and Multimedia Minister Gobind Singh Deo that the cabinet had approved the live broadcast of the 2018 World Cup on RTM led to Astro’s share price drop.

He noted Astro’s sell-off was also in tandem with the selldown in the broader market.

Chong also warned of a possible dropout of Astro as a component stock of the benchmark FBM KLCI ahead of the upcoming review in June.

When contacted, Astro said “there are pay-TV and free to air rights for the World Cup. Astro has secured the pay-TV rights covering all 64 matches live and in high-definition (HD) and standard definition”.

“Given that more than 40% of the matches will be available live, this may impact the number of [people] signing up for Astro’s full World Cup offering. This may also negatively impact the average revenue per user and subsequently [Astro’s] bottom line,” MIDF Research analyst Martin Foo said.

Frank Lin, a dealer’s representative at Hong Leong Investment Bank Bhd, pointed out that Astro is facing much competition from various service providers and also from affordable 4K HD-resolution media streamers.

Lin said these “cheap modems” are at only about RM200 to RM300.