Telco stocks decline on profit taking

Shares in MTN and Vodacom declined for a second straight day on Thursday (12 July 2012) amid profit taking, while political news in the case of MTN, and the announced resignation of Pieter Uys in Vodacom’s case, also weighed.

In midday trade on the JSE, shares in MTN slipped R1.92, or 1.32% lower, to R143, while Vodacom shed R1.29, or 1.35%, to R94.46, having lost R2.75‚ or 2.79%‚ to R95.75 on Wednesday (12 July).

The All Share Index surrendered 0.41% to 33,587 points.

A dealer at PSG Konsult told BusinessTech: “The JSE is red across the board, but in the case of MTN, the group has run pretty well over the past few weeks, extending its gains from R138 to R145. It looks like guys are getting out at these levels.”

The dealer also noted the political uncertainty surrounding MTN, namely that South Africa’s foreign ministry has suspended a former ambassador to Tehran after allegations he took a $200,000 bribe to help MTN Group win a mobile licence in Iran.

Department of international relations and co-operation spokesman, Clayson Monyela told Talk Radio 702 that Yusuf Saloojee, currently ambassador to Oman, had been suspended until investigations into his links to the MTN deal are concluded.

“If you take out political risk, MTN is a R160 share, and a must-have for one’s portfolio,” the dealer said. Shares in MTN were still well up from a month ago figure of R134.62, while the group hit its year best total of R146.50 on Monday (10 July). MTN boasts a market cap of R269.5 billion.

In the case of Vodacom, the dealer said that the announced resignation of Pieter Uys was not helping the group’s share price.

Uys led Vodacom’s debut listing on the Johannesburg Stock Exchange, achieving a shareholder return of 96% since listing. He is to be replaced by Shameel Joosub, the company announced today (5 July 2012). Joosub is the current CEO of Vodafone Spain, and previously served as the MD of Vodacom.

Shares in Vodacom have declined from R98.14 on 12 June, and from a monthly best of R98.50 recorded on 5 July. It is also some way off its year best price of R108.50 reached in early April.

Vodacom has a market cap of R140.56 billion.

Shares in Telkom, meanwhile continued to hover at levels last recorded a decade ago, at R18.13, off an additional 14 cents on the day.

Relates article

MTN-linked ambassador suspended

Why Pieter Uys is leaving Vodacom

Vodacom CEO Pieter Uys to move on

Telkom sell-off continues amid delist rumours

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Telco stocks decline on profit taking