Johannesburg - The black economic empowerment share offer of mobile phone operator MTN Group [JSE:MTN] has drawn enthusiasm from investors and analysts alike.
Dubbed Zakhele, a Zulu word meaning 'build your own', it offers black investors – among them Africans, coloureds, some Chinese and Indians – an opportunity to own some of MTN's 80.9 million shares.
Individuals can buy shares for R20 each, but they must invest at least R2 000 to take advantage of the opportunity.
Each share is valued at R107.46, so the difference will be funded through dividends over the six-year period the scheme is expected to run.
Interested investors can only buy the shares at Post Office outlets. Additional information is available through the Post Office, MTN outlets and its website.
MTN spokesperson Xolisa Vapi said investors from Gauteng and KwaZulu-Natal have displayed the most appetite for the shares.
"Thousands of investors have applied for the scheme with 19 out of each 20 paying upfront. Transaction volumes recorded during the first week of the offer show huge interest in the MTN Zakhele share scheme, with almost 100% of individuals and group investors who lodged their share applications paying for the shares when submitting their application forms," he said.
Johannesburg-based construction businessman Patrick Langa said that he was attracted to the share offer because he was inspired by MTN chief executive Phuthuma Nhleko's running of the company.
"I am impressed by how Nhleko is empowering black people as he has also filled executive positions with a number of talented Africans, especially considering the fact that SA undermines black talent," said Langa.
He said he needed to first go through the prospectus before deciding how much he would invest.
Johannesburg-based property developer Yeshin Hariparsad said the share offer would give him a chance to participate in the stock market.
"The stock market, though the share price fluctuates, gives people a chance to make long-term investments and reap lucrative returns," Hariparsad said.
He said his intention was to leave the money for at least 20 years as he was making the investment for his children's future needs.
Sibusisiwe Tongo said her father had offered to invest in the shares on behalf of her and her four siblings.
"When I first caught wind of the share offer, I never really thought I could afford them," she said.
"But I am grateful that my father has decided to invest R2 000 for each of his children."
Tongo said she hoped this would encourage her to develop a culture of saving and investing.
Eskom economic analyst Mandla Maleka said the scheme advantage about the opportunity was that it gave black people a chance to access the stock market and save.
"Instead of some people stashing their money under mattresses and pillows – areas where cash does not grow – they now have a chance to take a risk which could earn them high returns," he said.
Maleka said MTN had performed well and the chances were minimal that the company's share price would lose value in the next three years, the period in which investors will be locked-in before they are allowed to trade with other black investors. Dobek Pater, telecommunications analyst at Africa Analysis, said the share offer looked like an excellent bet.
Pater said if the mobile interconnection rates were cut and they ended up having an adverse impact on MTN's share price, the company would have to be innovative to search for new revenue streams, like data offerings, to replace the loss of revenue.
The Post Office said there was a much bigger response from the public during the first two weeks than that seen in other BEE public offerings the parastatal has handled in the past.
The offer closes on October 14.
- City Press