Financial

Telco stocks struggle in 2017

MTN was the best performing telco on the JSE in 2017.
MTN was the best performing telco on the JSE in 2017.

2017 was a tough year for South Africa's telecoms stocks listed on the Johannesburg Stock Exchange (JSE), with only MTN coming out with a positive return over the year.

MTN's share price grew by 8.3% between the beginning of January and the end of December 2017, according to data from Bloomberg.

In contrast, Vodacom's stock fell by 4.5% over the year. Blue Label Telecoms' significant investment in operator Cell C during 2017 did not inspire investors and the company's share price was down by 18.1% over the year. The worst performer over the year was Telkom, which saw its stock plunge by 35% in 2017.

So far in early 2018, most telcos' stocks were not fairing much better. MTN's share price, year to date (YTD), was up a miniscule 0.03% at R133.77 per share at the close of the market on 11 January.

Vodacom's share price has fallen 1.5% since the beginning of the year, trading at R141.80 per share. Blue Label has already seen an 11.3% drop YTD to R13.27 per share and Telkom was 1.6% lower YTD at R46.25 per share.

However, the majority of the stocks have performed well over a five-year period. Telkom's stock has grown by 174.5% over five years and Blue Label was up 50.8% over that period. Vodacom shares bought five years ago would now be worth 11.7% more.

The only stock that saw a decrease was MTN, as its share price dropped by 24.2% since January 2013.

Company

Share price

% change 2017

% change YTD

5YR return

MTN

R133.77

+8.3%

+0.03%

-24.2%

Vodacom

R141.80

-4.5%

-1.5%

+11.7%

Blue Label Telecoms

R13.27

-18.1%

-11.3%

+50.8%

Telkom

R46.25

-35%

-1.6%

+174.5%

* Share prices are all as at the market close on 11 January 2018; data from Bloomberg.

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