SHARES in South African mobile phone group M-Cell lost more than three percent at the start of trade on Friday, hurt by news that CEO Paul Edwards would be replaced by the group’s chairman on July 1.
A telecoms pullback in Europe did not help the mood.
M-Cell lost 50 cents or 3,3% to R14,50, pulling down the telecoms index two percent. At 0730 GMT it was off 2,7% at R14.60.
The news that Phuthuma Nhleko would take over from Edwards, which came after the market close on Thursday, took industry analysts off guard.
Barnard Jacobs Mellet cut its recommendation on M-Cell to ”market perform” from ”buy” after the news. But BJM analyst Harold Bopalamo told Reuters he maintained his long-term price target of R18 on the stock.
”I think it will underperform the market because the news is a bit of a shock, but then it should stabilise if assurances are given that there are no deeper problems and no more management changes of this magnitude,” he added.
M-Cell said Edwards’ appointment last August had only been an interim one, but it had not informed the market at the time.
”If the appointment was only ever going to be an interim one, they should have said so. I don’t believe it,” one analyst said.
European telecoms were one percent lower at 0730 GMT. ? Reuters