Best tech shares in SA

Tech listings on the JSE in South Africa have experienced a roller-coaster ride since the start of the year with acquisitions and investments boosting some companies to record highs, while failed deals and political meddling has caused some pain to investors.

Movement and dealings in the ICT space in SA so far in 2012 includes a number of high profile resignations and appointments, particularly at the start of the year; add to that a number of sticky ventures in Africa, increasing competition, acquisitions, and a rise in customer numbers, to name a few.

The effects of these ventures, results and earnings are then reflected in a company’s share price.

BusinessTech looks at some of the major tech and telecoms shares (trading over R10) over the past seven months, focusing on growth between “then” and “now”.

Company JSE Jan 2012*
Jul 2012*
Change (%) High (R)
Low (R)
Pinnacle PNC 10.85 16.79 +56.22 16.95 10.85
Naspers NPN 354.45 456.34 +28.75 475.30 351.50
EOH EOH 27.99 35.00 +25.04 36.10 27.62
Datatec DTC 41.15 47.35 +15.07 48.50 41.00
Reunert RLO 64.00 71.90 +12.34 73.00 63.00
Altron ATN 22.85 23.78 +4.07 25.60 22.52
MTN MTN 143.93 145.50 +1.09 146.50 127.55
Vodacom VOD 90.81 90.05 -0.84 110.41 89.50
Altech ALT 53.80 46.60 -13.38 55.40 46.00
Telkom TKG 29.15 18.00 -38.25 29.69 17.91

* Share prices as of 3 January 2012 and 18 July 2012

Biggest movers

Pinnacle continued its trend of “meteoric” growth, more than doubling it’s share value over a 52 week period – and growing over 56% this year, alone.

Through its subsidiaries, Pinnacle offers hardware and software products, implementation solutions as well as structured finance solutions. In October 2011, Pinnacle entered into a sale of shares agreement to acquire a 49% stake in multi-function printer company, Explix.

Naspers showed a 29% growth in share value since the beginning of the year, steadily climbing on growth in its Pay-TV segment, as well as a strong performance by the group’s Internet business investments.

In its latest  earnings report, Naspers indicated that its investments in BuscaPe, Mail.ru, Tencent and Allegro all showed strong growth in their respective markets; investors also liked the recommendation that the company’s annual gross dividend be increased by 24%.

EOH‘s over 25% growth can be attributed to the company’s strategic acquisitions. EOH’s primary focus, it reported, was to increase its managed services, Microsoft and BPO businesses and, accordingly, the group made several acquisitions in these areas.

Datatec has seen a 15% boost in share-price since January, hitting its 6-month high in early July. The company, through its 100%-owned subsidiary Westcon group, has been expanding operations in Africa, Latin America and Europe, with an expanding portfolio and a number of strategic aquisitions.

The middle-reach

At this mid-year measure, shares in major South African telecom operators have shown to be pretty flat, with periods of ups and downs in between.

MTN in particular, while showing a marginal 1.0% growth in share price since it’s January opening, has seen many a rise and fall in its share price in response to many controversial factors which have had an impact on the company over the past six or so months.

Most notably of those is the Iran saga, in which Turkish operator, Turkcell has opened a case in the US accusing MTN of bribing its way into Iran to secure a lucrative mobile phone operating licence.

Vodacom‘s shares, too, have shown to be relatively flat from it’s 2012 opening price, having dropped from its R110.41 high in April, after a healthy dividend payout. Adding to the drop was the announcement of CEO, Pieter Uys, taking his leave from the company.

Down, down, down

Allied Technologies (Altech) has had a difficult time with its operations in East and West Africa,  which has weighed in on the company’s share price.

In April,  the group reported a pre-tax loss of R240 million for year ended February 2012, from a prior profit of R459 million, following losses in East and West Africa.

Perhaps unsurprisingly, embattled convergence company, Telkom sits at the bottom of the pile losing over 38% since the start of the year. Telkom was blocked by the South African government – which owns 39% of the encumbent operator – from entering into a deal with Korea’s KT Corp.

In May, cabinet rejected a R2.68 billion deal proposed by South Korea’s KT Corporation to buy a 20% stake in Telkom, and gave Minister of Communications, Dina Pule three months to come up with an alternative strategy for Telkom.

After Telkom withdrew its cautionary announcement, effectively ending any hope of a deal with KT Corp, the conmpany’s share price has, to-date, declined to its worst levels this year, hitting a low of R17.91 during trade on the JSE on Wednesday (18 July 2012).

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Best tech shares in SA