Digital tax may benefit media companies — AmBank Research

KUALA LUMPUR: The digital service tax on foreign service providers may benefit media companies with TV and over-thetop (OTT) segments such as Astro, Media Prima and Star Media, says AmBank Research.

However, it was cautiously optimistic over this development, as it remained to be seen the extent to which the six per cent tax would benefit local players as revealed by Deputy Finance Minister Datuk Amiruddin Hamzah.

Malaysia’s digital tax rate is lower compared New Zealand (15 per cent), Russia (18 per cent) and Norway (25 per cent).

"Furthermore, pricing alone might not deter customers from choosing preferred content provided by foreign OTT players,” AmBank Research said in a research report yesterday.

It maintained a “neutral” call on the media sector due its unexciting prospects amid a challenging operating environment, following the structural shift from traditional media to digital platforms, coupled with the challenging monetisation of digital initiatives and a subdued advertising expenditure outlook for 2019.

AmBank Research also maintained its recommendations and fair value for Media Prima (HOLD, 42 sen), Media Chinese (HOLD, 24 sen), Star Media (HOLD, 73 sen) and Astro Malaysia (HOLD, RM1.69).

At 12.30, Media Prima dropped half a sen to 50.5 sen, Media Chinese was flat at 22 sen, Star Media lost one sen to 73 sen and Astro Malaysia went down two sen to RM1.57. — Bernama