The best and worst performing SA tech shares in 2017 so far

The South African tech and telecoms sector has struggled in 2017 thus far, with most of the sector’s share prices down in the first six months.

The JSE All Share Index, by comparison, has been flat over the period, up only a fraction from 51020.66 at the start of the year to 51072.86 in June.

Among the country’s biggest tech and telco players, Naspers and MTN stand out on opposite ends.

Naspers has continued to reach new highs, with its share value up by over 26% in the past six months, off an already high base. The group reportedly accounts for 15% of the all share index alone.

The internet and media group has been carried higher by its significant stake in China’s Tencent, which has surged almost 50% higher in Hong Kong.

Conversely, mobile operator MTN has seen a significant drop, down almost 13% so far in 2017. MTN’s has been hit by regulatory problems – specifically in Nigeria – which led to the group posting its first-ever annual loss.

The group’s share price has lost more than half of its value since 2015.

Beyond each company’s operational performances, companies in South Africa are working in adverse economic conditions, underpinned by two rating downgrades to sub-investment grade status, as well as the economy entering a recession.

These knocks have led to investor outflows in the local exchange; however, economists say this provides a good opportunity for domestic investors to buy into stong businesses at attractive prices.

The tables below show how tech and telco shares have changed in the past six months.

Large cap companies (> R10 billion)

Aside from Naspers’ strong performance in 2017 so far, the two other companies to see their share value increase are Vodacom and Datatec.

Datatec reported a drop in revenue and profit for the full year ended February 2017, following what it described as a very challenging year. However the group is still weighing up a possible sale of a major share of the struggling Westcon-Comstor’s operations, which is expected to give the group a boost.

Vodacom had another solid financial year, reporting a boost in profit and service revenue – as well as three million new customers – for its year ended March 2017.

A big move at the operator is its acquisition of a 34.94% stake in Kenya’s Safaricom, which will enhance the group’s footprint in Africa. The move has been well-received by investors.

Mid cap companies (R1 billion – R10 billion)

Small cap companies (< R1 billion)

Among the small-cap tech companies, there were no gainers in 2017 so far; however, coming off a small base and in low trade volumes, these variations fluctuate greatly.