Newly listed telecommunications utility Telkom is to replace networking services group Dimension Data on the JSE`s top 40 companies index after trade closes today, according to the stock market.
A Stock Exchange News Service announcement today says Telkom, which was listed on Tuesday on the JSE, will replace the once darling DiData, which will fall off the prestigious Alsi 40 index. The Alsi 40 is an index of the 40 biggest companies on the JSE measured by market capitalisation - the number of shares in issue multiplied by the price.
The announcement says Telkom will be added to the index with a shares in issue figure of 557 031 819 and an "investibility" weight of 30%. DiData will be removed from the index.
Ironically, DiData moves down onto the mid-cap index (the next 100 biggest shares) and pushes rival Datatec off that index onto the small-cap index.
JSE indices are now based on a free float system that takes into account the number of shares that are available for trade on the open market, as well as the market capitalisation. Thirty percent of Telkom`s shares are available for trade on the open market with Southern Bell Corporation and Malaysian Telekom holding 30% together, and government holding the remainder.
Telkom has a market capitalisation of around R3.94 billion, while DiData has seen its market capitalisation dwindle to around R2.6 billion compared with the heady days of its London listing of R15 billion in September 2001 when its share price hit R78. However, DiData has a larger free float with more than 50% of its shares available for trade on the open market.
Securities chief dealer Paul Tighy says there could be a possibility of a bounce in the DiData share price during the last 10 minutes of trade on the JSE today - the market`s auction period.
"We know that some of the index tracker funds have already made their adjustments for the Alsi 40 and this meant they bought the futures and sold the underlying shares. This means there is a strong possibility of a reverse arbitrage situation that could see them selling the futures in favour of the underlying shares and that could help DiData," he says.
DiData is also feeling the effects of the trading statement issued by its Asian subsidiary Datacraft earlier this week. This has caused its share price to dwindle from 256c and was last seen 4c down at 197c.
Telkom`s share price was down 40c at R28.30 as the utility has been infected by the general depressed state of the world telecoms market. Its American Depository Receipts debuted on the New York Stock Exchange yesterday.
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