Telkom rallies 5% on nationalisation rumour

Shares in Telkom rallied in excess of 5% in afternoon trade on the JSE on Monday as investors entertained the rumour that the group may be re-nationalised.

The Department of Communications (DoC) is set to present a list of three strategic options for Telkom to cabinet later this week, having originally blocked a deal between the incumbent telecoms provider and Korea based KT Corp in June.

One dealer pointed to “reasonable” trade volume, with 27 million shares changing hands shortly after 14:00.

Another dealer said that rumours were doing the rounds that Telkom could be nationalised and delisted, although she added that there was no substantiated evidence. “Investors could be looking for some value in the stock, having endured a miserable run in recent time” the dealer said.

Last week, an analyst suggested that government could offer R24 a share for Telkom, giving it a market cap of approximately R12 billion.

Shares in Telkom rallied 4.32% to R19.31 by close of play on the JSE on Friday (14 September) and by 14:20 on Monday, it advanced a further R1.13, or 5.85%, to R20.44, having reached an intraday best of R20.75 – or in excess of 7% in noon trade.

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Telkom has not discussed delisting