Telecommunications

Best and worst tech shares in SA

Staff Writer

 ·2 Jul 2014

Listed tech stocks have performed solidly on the the JSE over the past six months, with the majority of companies in the sector showing positive growth up to the end of June.

Both low-base stocks (valued under R10) and high-base stocks (valued higher than R10) saw the majority of listed companies post growth, led by Huge Group (158.3% – off a low base) and Telkom (61.2%).

The interim period has not been without its losers, with scandal dragging Pinnacle Holdings’ stock down 41.7% over the course of the half year, and digital-terrestrial migration woes weighing Ellies down 33%.

BusinessTech presents the best and worst performing tech shares on the JSE during the first six months of 2014.

Best and worst performing tech shares (low base)

Top performer: Telkom

Telkom has pleased investors over the past six months with the promise of a massive turnaround for the company.

In its most recent financial reporting, the group pointed to a marginal rise (1.1%) in group operating revenue for the year ended March 2014, to R32.5 billion, while swinging back into profit of R4.6 billion, from a prior loss of R11.15 billion in 2013.

According to group CEO, Sipho Maseko, “efforts to turn Telkom around are starting to produce results”, and the group is on course to reinstate the dividend in the 2015 financial year.

The group is however, still faced with declining fixed line numbers, and faces the tough task of cutting its workforce – an action which has not gone unchallenged by unions employees.

Best and worst performing tech shares (high base)

Worst performer: Pinnacle

Pinnacle Holdings’ stock took a massive knock during the interim period following scandal involving a company director.

Shares in the company have dropped over 40% since the start of the year, taking the biggest hit after it was revealed that an executive director, Takalani Tshivhase, was arrested on bribery and corruption charges.

Tshivhase stands accused of offering SAPS Lieutenant-General Bonginkosi Ngubane R5 million to secure a R1.6 billion tender for Pinnacle.

Pinnacle lost approximately 50% of its market value the day after the news hit the media and was slow to recover after the company was also accused and is being investigated for possible insider trading.

Tshivhase and Pinnacle management have denied all allegations.

More on SA tech companies

Pinnacle insider trading probe

Resurgent Telkom eyes dividend return

Ellies interim profit slides