Telkom performs best in its sector worldwide
October 9, 2003
By Gugulakhe Masango
Johannesburg - Telkom's share price smashed through the R50 level yesterday, hitting an all-time high and making it the world's best performing telecommunications stocks this year.
The telecommunications group that operates the country's only fixed-line network made its debut on the JSE Securities Exchange on March 4 at R28.20 a share. On the first day of trading, 28.1 million of the 557 million shares changed hands, and the stock has not showed any signs of slowing down since.
Khulisa shareholders, who paid R22.40 for their Telkom shares when they were listed, are continuing to reap the benefits.
Harold Bopalamo, a telecoms analyst at Barnard Jacobs Mellet, said the share price was performing because Telkom's turnaround had materialised.
"It's an element of sentiments and the story on Vodacom - 50 percent owned by Telkom - that it was to enter the lucrative Nigerian market had a positive impact."
Bopalamo said the sustainability of the performance would depend on the company continuing to deliver good results.
"If Vodacom wins in Nigeria there will be an added upside to Telkom's share price."
Bopalamo said that for Khulisa shareholders the Telkom share price was one of the best returns one could get on the JSE.
"The stock is one of the best performing telecoms stocks following the Indonesian telecoms companies that are performing well," he said.
He added that global telecoms firms had done well since November last year, although shares had varied since January.
The share price of US-based AT&T was down 25.8 percent and Telkom's strategic management partner, SBC Communications, has fallen by 22.9percent since January. while Telkom's share price has surged 61.2 percent since its listing Max Koep, a telecoms analyst at Deutsche Securities, said Telkom had outperfomed the MTN Group by 1 percent since its listing on March 4 and was one of the few top-performing stocks across the globe.
Telkom "has cut its costs, delivered good results and competition, though the second network operator had been put aside," he said.
Telkom was also improving its services in the face of looming competition.
Telkom added R2.10 to R50.20.
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