{"id":46574,"date":"2013-09-25T23:23:28","date_gmt":"2013-09-25T21:23:28","guid":{"rendered":"http:\/\/businesstech.co.za\/news\/?p=46574"},"modified":"2013-09-26T08:46:13","modified_gmt":"2013-09-26T06:46:13","slug":"time-to-buy-telkom-shares","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/telecommunications\/46574\/time-to-buy-telkom-shares\/","title":{"rendered":"Time to buy Telkom shares?"},"content":{"rendered":"

Analysts have poured cold water on a resurgent Telkom<\/a>, for now, despite recent gains in the group’s share price and the general upswing in sentiment since the appointment of CEO, Sipho Maseko<\/a>.<\/p>\n

Shares in Telkom climbed 59 cents, or 2.5%, to R23.80\u00a0in trade on the JSE on Wednesday (25 September), taking it to its highest levels since May 2012.<\/p>\n

The telco’s share price has gained R6.87 or 40.58% in the year to date period, lifting its market cap to R12.4 billion. It hit its lowest trade of\u00a0R11.93 in early May.<\/p>\n

According to\u00a0Nadim Mohamed<\/a>, investment analyst and partner at First Avenue Investment Management<\/a>, the\u00a0company’s\u00a0new board and executive team have to be complimented for injecting a much-needed fresh perspective into Telkom.<\/p>\n

“The recent run in the share price (90% since May) demonstrates the increasing confidence that the market has in a Telkom turnaround,” he said.<\/p>\n

However, the analyst said he would recommend waiting a bit for more clarity on certain issues which will have a major (positive or negative) impact on the business .<\/p>\n

“This includes: scale of voluntary retrenchments, degree of self-provisioning by mobile operators, possible reduction of Telkom Mobile capex, impact of recent pricing revisions and execution of the NGN strategy.”<\/p>\n

Mohamed said that some of these positives have already been priced into the stock, “and require more clarity before assessing the potential for any future upside”.<\/p>\n

Another analyst said that he was weary of\u00a0investing in any company with excessive government control of its strategic processes.<\/p>\n

Government holds a 39.7% direct stake in Telkom and an additional 10.6% indirect interest though the state-owned Public Investment Corporation (PIC).<\/p>\n

Irnest Kaplan<\/a>, MD of Kaplan Equity Analysts<\/a> maintains there are still too many uncertainties in Telkom to start getting carried away, while others have said they want to see an improvement in financial results before investing.<\/p>\n

In June, Telkom reported a 73.2% decline in headline earnings per share to 87.0 cents in results for the year ended March 2013.<\/p>\n

Group operating revenue decreased by 1.7% to R32.501 billion (2012: R33.079 billion).<\/p>\n

The decrease, Telkom said, was mainly due to lower fixed-line voice revenue, partially offset by an increase in mobile and data revenue.<\/p>\n

Telkom\u2019s board also took the decision to impair the carrying value of the assets of the group by R12 billion for the year ended 31 March 2013, giving the group a net asset value is R34 per share.<\/p>\n

In March, Telkom appointed\u00a0Sipho Maseko\u00a0as its new group chief executive, and Brian Armstrong<\/a> as its chief operating officer. The group also appointed new board members in December.<\/p>\n

Last week, Maseko\u00a0said that both\u00a0Vodacom<\/a> and MTN<\/a> have \u201cunfairly benefited\u201d from Telkom-subsidised termination rates, adding that the time had come to end it.<\/p>\n

More news on Telkom<\/h3>\n

Telkom is no darling: analyst<\/strong><\/a><\/p>\n

Telkom: time to stop subsidising Vodacom, MTN<\/strong><\/a><\/p>\n

Union collars Telkom over executive pay<\/strong><\/a><\/p>\n

Telkom executive pay shock<\/strong><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Investor skepticism over Telkom remains for now, despite recent gains in the group’s share price.<\/p>\n","protected":false},"author":10,"featured_media":33394,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[21],"tags":[26,28,3757,2994,2414,65,27],"class_list":["post-46574","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-telecommunications","tag-headline","tag-mtn","tag-nadim-mohamed","tag-pic","tag-sipho-maseko","tag-telkom","tag-vodacom"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/46574","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=46574"}],"version-history":[{"count":17,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/46574\/revisions"}],"predecessor-version":[{"id":46623,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/46574\/revisions\/46623"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/33394"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=46574"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=46574"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=46574"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}