Telkom sell-off continues amid delist rumours
Telkom has seen its market cap dip below R10 billion (R9.7bn) amid a continued sell-off of its shares on the JSE as investors worry over nationalisation rumour.
By 13:30 local time, shares in Telkom dipped to R18.65, hovering at its worst levels in almost a decade.
Vodacom’s market cap exceeds R144 billion, while MTN is at a significant price of R273.37 billion.
“Investors do not have faith in Telkom. There is a rumour which says that government wants to take a bigger stake in the group, and then delist from the JSE. Investors are selling on that rumour,” said an analyst at PSG Konsult. “I would not advise my clients to invest in Telkom at this stage,” he said.
Reuters recently reported that South Africa’s ruling ANC is debating ways to nationalise Telkom, citing a delegate at the party’s five-yearly policy conference.
“There is support for the measure but it will not be included in the economic report because of the sensitivity,” the delegate told Reuters on the sidelines of the event.
“We discussed financing mechanisms to buy out the share not held by government and pension funds,” the delegate added.
South Africa’s government and its employee pension fund together hold a 50.7% stake in Telkom, according to Thomson Reuters data.
Government has a 39.8% direct ownership of Telkom, while the Public Investment Corporation (PIC), which is wholey owned by the government, has a 10.9% ownership in the telco company.
Meanwhile, shares in rival operators MTN and Vodacom were making solid gains on Friday, in line with the All Share Index.
Shares in Vodacom climbed 95 cents to R96.85, despite the announcement that its CEO, Pieter Uys is stepping down. “Vodacom is bigger than one man,” the analyst at PSG said.
MTN gained 24 cents to R144.84, while the All Share Index added 0.41% to 34,364 points.
“MTN is a cash cow and I would have no problems investing in the company, even at these levels, up to R155-R160,” the analyst said.
Related articles
Telkom shares tank on KT Corp deal block
Telkom, Korea Telecom transaction not going ahead
Telkom shares slump 5% as investors seek KT Corp clarity
Loading ...