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Johannesburg - The telecommunications industry was in the spotlight on the JSE on Thursday, with the rest of the market moving mostly sideways.
The focus came after fixed-line operator Telkom [JSE:TKG] informed the market that its earnings for the full year are likely to increase nine-fold in comparison to last year.
The company’s share price, which is hovering around its 52-week high, immediately rose more than 5%.
Its two biggest competitors, MTN [JSE:MTN] and Vodacom [JSE:VOD], also performed strongly.
But these performances was not enough to boost the All-share index, which was 0.26% lower on 49 560 points. The Top 40-index also lost ground and was down 0.27% on 44 610 points. The Industrial and Resources indices were also marginally lower, but the Financial index strengthened with 0.27%.
With the gold price dropping even further on Thursday, the Gold index lost another 2.82%.
But most of the attention was on Telkom, which indicated that headline earnings, the main measure of profitability in South Africa, will be between 772c and 789 cents a share in the year to end-March, from a restated 86.2c per share a year earlier.
Chief executive Sipho Maseko said this was due to cost saving measures and the fact that most write downs was done in the previous years.
Telkom also benefitted from a decrease in mobile termination rates, after telecoms regulator Icasa required operators to reduce the fees they charge one another to connect calls across networks.
By midday, Telkom traded up 5.5% at R38.24. The share price reached a 52-week high on 10 April when the share traded at R39.70.
MTN said on Wednesday that the same termination rates, which Telkom referred to, is making a serious dent in its South African income, but that did not prevent the share price from reaching another record on Thursday, although the share was only 0.18% higher on R225.51.
Vodacom improved with 2.19% to R130.70. The company announced this week that the dispute with its minority partner in the Democratic Republic of Congo was resolved, which will enable him to fully exploit the market in that country, which is potentially the biggest in the Vodacom stable. Vodacom recently concluded the take-over of Neotel, Telkom’s biggest rival in the fixed-line market.
Naspers [JSE:NPN] continued the weaker trend of the last few days and traded another 1.99% lower on R1 159.00.
Gold shares took another severe beating, with Harmony [JSE:HAR] trading 6.47% lower on R26.97 and Gold Field [JSE:GFI] lost 3.21% to R36.83. Both these shares have now lost about one third of their value after reaching highs in Augusts last year.
In the financial sector Standard Bank [JSE:SBK] strengthened with 0.70% to R143.00 despite warning shareholders that the bank’s bad debt increased in the first four months of the new financial year.
The focus came after fixed-line operator Telkom [JSE:TKG] informed the market that its earnings for the full year are likely to increase nine-fold in comparison to last year.
The company’s share price, which is hovering around its 52-week high, immediately rose more than 5%.
Its two biggest competitors, MTN [JSE:MTN] and Vodacom [JSE:VOD], also performed strongly.
But these performances was not enough to boost the All-share index, which was 0.26% lower on 49 560 points. The Top 40-index also lost ground and was down 0.27% on 44 610 points. The Industrial and Resources indices were also marginally lower, but the Financial index strengthened with 0.27%.
With the gold price dropping even further on Thursday, the Gold index lost another 2.82%.
But most of the attention was on Telkom, which indicated that headline earnings, the main measure of profitability in South Africa, will be between 772c and 789 cents a share in the year to end-March, from a restated 86.2c per share a year earlier.
Chief executive Sipho Maseko said this was due to cost saving measures and the fact that most write downs was done in the previous years.
Telkom also benefitted from a decrease in mobile termination rates, after telecoms regulator Icasa required operators to reduce the fees they charge one another to connect calls across networks.
By midday, Telkom traded up 5.5% at R38.24. The share price reached a 52-week high on 10 April when the share traded at R39.70.
MTN said on Wednesday that the same termination rates, which Telkom referred to, is making a serious dent in its South African income, but that did not prevent the share price from reaching another record on Thursday, although the share was only 0.18% higher on R225.51.
Vodacom improved with 2.19% to R130.70. The company announced this week that the dispute with its minority partner in the Democratic Republic of Congo was resolved, which will enable him to fully exploit the market in that country, which is potentially the biggest in the Vodacom stable. Vodacom recently concluded the take-over of Neotel, Telkom’s biggest rival in the fixed-line market.
Naspers [JSE:NPN] continued the weaker trend of the last few days and traded another 1.99% lower on R1 159.00.
Gold shares took another severe beating, with Harmony [JSE:HAR] trading 6.47% lower on R26.97 and Gold Field [JSE:GFI] lost 3.21% to R36.83. Both these shares have now lost about one third of their value after reaching highs in Augusts last year.
In the financial sector Standard Bank [JSE:SBK] strengthened with 0.70% to R143.00 despite warning shareholders that the bank’s bad debt increased in the first four months of the new financial year.
