The price of shares in Africa's largest cellular company, MTN, have risen by just over 15% in the past week-and-a-half.
The company's shares closed yesterday at R113.19, a 15.4% gain on the closing price on 8 June of R98.22. The company's highest price in the past year was R132 on 28 August 2009.
MTN's shares started moving upwards the day before the company officially confirmed it was no longer in talks with Algeria-based Orascom. They have continued to gain as news grew that the company could be in talks to buy 26% of Reliance Communications.
Rumours of a possible deal between MTN and Reliance started surfacing in the media at the end of May. On the last day of that month, MTN's shares closed at R107.95, before moving sharply downwards to the 8 June close.
The company started looking at buying out some of Orascom Telecom in April. Orascom operates in Algeria, Tunisia, Central African Republic, Burundi, Namibia, Zimbabwe, Egypt, Bangladesh, Pakistan and North Korea.
However, the deal collapsed when the Algerian government insisted it wanted to buy the 51% it didn't own in Djezzy, the jewel of Orascom.
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MTN's shares also gained traction last September, when it said the multibillion-dollar deal between it and Bharti Airtel was off the cards, this time because of regulatory issues in SA and India - Bharti's home country.
Shares in MTN closed 2% higher within two days after confirmation that the Bharti marriage was cancelled, the second time the two companies have failed to merge.
Chris Gilmour, Absa Investments analyst, says it is likely that some shareholders could see Reliance as a positive move for MTN.
He says the market has clearly shown its dissatisfaction with the company's attempts to merge, such as with the failed Bharti deal, as seen in the price moving upwards when talks collapsed.
Gilmour says MTN's share price increase could be a result of talks with Reliance, the collapse of Orascom, or the fact that the company will see good traffic growth during the Soccer World Cup as it is a Fifa sponsor.
However, he adds, it is clear that investors want MTN to remain independent.
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