World Bank ranks Telkom IPO fourth in global deals
World Bank ranks Telkom IPO fourth in global deals
April 20, 2004
By Gugulakhe Masango
Johannesburg - The World Bank's global development finance report has ranked Telkom's initial public offering (IPO) in fourth place in a list of the 25 largest international deals done by firms from developing countries.
The IPO was valued at $502 million (R3.2 billion).
The World Bank report, released yesterday, showed that last year's largest deal was the $802 million People's Insurance Company of China IPO, followed by the $561 million privatisation of Poland's Telekommunikacja Polska and the China National Foreign Trade Transportation Corporation, valued $540 million.
The list of 25 international equity deals was dominated by services firms, especially telecommunications, banking and insurance firms.
Belinda Williams, Telkom's investor relations executive, said the ranking would be good for the firm's standing in the investment community and for marketing purposes. "Investors will notice us," she said.
A telecommunications analyst with a local financial institution said the ranking was "a very interesting statistic, but certainly has no direct bearing on the pros and cons of investing in the company".
Telkom was not the only South African company that made the list.
Mining group Gold Fields was ranked 16th for its $194 million book building exercise and retail and consumer goods group Steinhoff International Holdings snapped up 18th place for its $156 million institutional offering.
The success of the Telkom IPO came as a surprise last year because of the bleak international telecommunications market, which was marred by the failure of US-based Worldcom and a dearth of IPOs in the industry.
Despite this, the department of public enterprises went ahead with the partial listing of the former parastatal on March 4 last year, with shares opening at R28 each on the JSE Securities Exchange.
Later that same week, Telkom's depository receipts opened at $14.01 on the New York Stock Exchange.
Telkom is now trading at above R80 in Johannesburg and above $50 in the Big Apple.
The market continues to be buoyed by the fact that there is still no indication of when its rival, the second fixed-line network, will open for business.
This means Telkom will continue to enjoy its monopoly.
Telkom stock fell R2.80 to close at R84, in line with the sector, which dropped 3.15 percent.
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