Government remains silent on rumours that it is eying the sale of its stake in Vodacom and Telkom in order to fund state energy utility, Eskom.<\/p>\n
Shares in Telkom were up almost 2% on Thursday (25 September) to R50.88, following a sharp decline since 12 September, kick-started by concerns about its turnaround strategy.<\/p>\n
Shares in Telkom have fallen from a high of R62.11 on Friday, 12 September, to a 30-day low of R49.99 on Tuesday (23 September) ahead of Heritage Day – a national public holiday.<\/p>\n
Bloomberg reported on the speculation of a potential sale last week, with the South African government having identified assets that could be sold to help Eskom as part of a rescue package.<\/p>\n
\u201cTelkom was flagged definitely as an asset government may sell,\u201d Owen Nkomo, head of Inkunzi Investments, told the media agency.<\/p>\n
\u201cSomeone was aggressively selling and there is a potential overhang of Telkom shares should the government dispose of its holdings,” he said.<\/p>\n
Government has a 39.79% stake in Telkom, while eyes also shifted to Vodacom in which government has a 13.91% interest, with a combined worth exceeding R35 billion.<\/p>\n
All three parties, government, Telkom and Vodacom have refused to comment on speculation.<\/p>\n
Reuters reported that Telkom has been a must-have in fund managers\u2019 portfolios this year, after investors were impressed by a cost-cutting plan by new chief executive Sipho Maseko, which includes slashing jobs.<\/p>\n
But traders appear more apprehensive about the fate of the new strategy after Telkom suspended the restructuring initiative to consult with unions, said Bruno van Eck, a portfolio manager at Thebe Securities.<\/p>\n
Telkom, which has not paid dividends in three years, is also in talks with MTN Group about sharing networks, a deal that should also save Telkom cash.<\/p>\n
Doubts about the fate of Telkom and MTN network sharing deal \u2013 which if it secures regulatory approval should also reduce costs \u2013 were also weighing on the share price, Reuters said.<\/p>\n
Telkom drops 5% on turnaround concerns<\/strong><\/a><\/p>\n Cell C wants to stop the MTN Telkom deal<\/strong><\/a><\/p>\n