Telkom shares dip below R25

Telkom (TKG) continued to bleed in noon trade on Friday (March 2,2012), having shipped 7% over the past three days – amid a lack of clarity on a pending Competition Commission case, and concerns that a potential deal with Korea Telecom Corp may not go through.

By noon on the JSE, Telkom declined 2.21%, or 56 cents, to R24.78, its lowest level in more than three years.

A dealer at PSG Konsult said that pressure would remain on the telecoms group, due to a lack of news on potential R3.5 billion anti-competitive fine, and amid rumours that KT Corp may abandon its intention to purchase a 20% stake in Telkom.

“When Telkom first announced a potential deal with KT Corp, a figure of R36 per Telkom share was mentioned. At its current price, we are looking at 40-50% lower than that,” he said.

“With uncertainty cast around a potential large fine, KT Corp may well decide to walk away from a deal. And at R3.5 billion rand, that represents about R7 of Telkom’s share price,” the dealer said.

He also pointed out that the group’s mobile arm, 8ta, “hasn’t come off yet”.

Shares in Vodacom (VOD) and MTN(MTN) were also under pressure, off 97 cents to R102.03 cents, and 1.43%, or R1.95 to R134.55, respectively.