Turkcell pegging MTN back on the JSE

Despite general consensus that there is very little substance to Turkcell’s legal claims against MTN (MTN), the ongoing battle is pegging back the SA-based mobile operator on the JSE as investors continue to stay away, according to a local analyst.

Group President and CEO of MTN Group, Sifiso Dabengwa on Thursday (April 12, 2012) accused Turkcell of making “sensationalist allegations” against the group in obtaining a licence in Iran, and dismissed the charges of human rights abuses as “both false and offensive”.

The Turkish mobile operator has launched a $4.2 billion lawsuit in a US court accusing MTN of bribing its way to the Iranian licence and alleging human rights abuses.

An analyst at PSG Konsult says that MTN’s share price barely reacted to Dabengwa’s comments.  “There seems to be nothing to Turkcell’s claims, especially given that it has filed in the US. That said, the ongoing debate on whether MTN is guilty or not is creating uncertainty in the market and is likely to drag on for some time yet. MTN could be at R140,” he said.

In early afternoon trade on the JSE, MTN moved a fraction into the black, to R131.31 having leaked more than a percent at its worst levels on Thursday, but more or less in line with the local bourse.

“R130 looks like a level of support since the filing of the Turkcell claim.  There are clearly sellers in the system keeping the price down.  Hopefully the company is utilizing the depressed share price to buy-back some shares,” opined Fred Teeling-Smith, a telecoms analyst at STANLIB.

Dabengwa said that MTN did not cause Turkcell to lose “its” licence in Iran, as Turkcell has claimed.

He stated that what was of particular concern were the allegations that accused MTN of complicity in human rights abuses in Iran.  “Such allegations are both false and offensive,” he said.

At the start of the month ((April 2, 2012) shares in MTN declined as a much as R7.02, or 5.2%, to R128 on the JSE – before ending the day 3.87% off at R129.80.

In March, MTN Group released results for the year-ended 31 December 2011, reporting a 16.2% growth in group subscriber numbers, to 164.5 million and a 6.3% increase in revenues, to R121.884 billion. The group’s adjusted headline earnings per share increased 43.2%, to R10.70 cents.

The group declared a final dividend of 476 cents.

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Turkcell pegging MTN back on the JSE