Telecommunications heavyweight Telkom remained the talk of the town during the morning session on Monday as news of a potential buyout and negotiations with the UK’s Vodafone set pulses racing. However, the market as a whole was mixed as resources generally gained some ground, but banks felt the heat from a struggling
sector in the United Kingdom.
Dow Jones Newswires provided an update on the Telkom story on Monday. Dow Jones said UK mobile phone operator Vodafone has made a non-binding offer for 12,5% of Telkom SA’s stake in South African mobile operator Vodacom Group, quoting a person familiar with the matter.
Earlier on Monday, Telkom said it had been approached by Vodafone to buy a portion of Telkom’s 50% stake in Vodacom.
If the bid is successful Vodafone’s stake in Vodacom would increase to 62,5% from 50%.
Separately Telkom also received a letter on Friday from a consortium interested in making an offer for all of Telkom, conditional on it spinning off its entire stake in Vodacom.
The consortium is made up of South African politician-turned-businessman Tokyo Sexwale’s Mvelaphanda Holdings, New York-listed Och-Ziff Capital Management LLC and other strategic backers.
“Telkom is up R14, but the rest of the market is pretty mixed,” said Deon Strydom from Nedbank Equity Capital Markets.
He explained that financials were under pressure and while Anglo and BHP Billiton had made some headway, many other stocks were down.
At 12.20pm, the all-share index was up 0,17%, with platinum up 1,42%, resources 0,78% and gold 0,97%.
Industrials lost 0,25%, while financials fell 1,38% and banks ‒1,37%.
The rand was bid at 7,71 to the US dollar from 7,62 when the JSE closed on Friday, while gold was quoted at $889,45 a troy ounce from $882,95/oz at the JSE’s last close.
Telkom was last at R151,06, a gain of 10,26%, or R14,06, but off the day’s high of R158, while mobile carrier MTN lost 214 cents, or 1,41%, to R150,05.
Separate talks between MTN and India’s Reliance are taking place, although it is now expected that this will only entail a share swap and thus no actual cash inflows. Expected cash inflows have been one of the factors behind gains in the rand, although these gains were fading on Monday.
Previous bidder for MTN, Bharti — also from India — had reportedly valued the company at $45-billion to $50-billion, and while this talk was viewed as positive for SA’s capital flows and did cause some stirrings on the rand, those talks have since fallen through.
Among banks and financials, Standard Bank dipped 133 cents, or 1,60%, to R81,77, Nedbank lost R2,12, or 2,13%, to R97,51 while Absa receded by a more palatable 41 cents to R85,09.
Investec was in the red by 2,81%, or R1,49, at R51,50.
On the resource index, Anglo American was up R3,82 to R519,50 and BHP Billiton gained R1,75 to R293.75.
Petrochemicals group Sasol was up by R4,20 to R477,20.
Among gold miners, AngloGold Ashanti lost R15,50, or 5,41%, to R271.
Platinum miner Anglo Platinum gained R21,99, or 1,66%, to R1 347 and Impala Platinum added R4,62 or 1,42% to R329,63.
Elsewhere, brewer SABMiller was down R1,55 at R195,08 and Liberty International was down by 1,05%, or R1,40 at R132,50. – I-Net Bridge