Dimension Data shares edged higher in thin trade on the JSE this morning as the market mulls over the news that the company has concluded a black economic empowerment (BEE) deal, although the details are deemed to be sketchy.
By 11.30am, the DiData share price had gained 4c at 492c after spending most of the morning steady at 488c. The rest of the IT index was on a slippery slope as it had fallen 55 points, or 0.76%, to 7 171.50, but the all share index had advanced 66 points to 10 672.
JSE dealers say the market is behaving in an undecided manner, with little in the way of overseas news to get local investors excited.
"In a way it is a bit surprising about DiData, because it is the one bit of real news the market has and yet it is not reacting," one dealer says.
DiData announced yesterday that 25% of its shares would be sold to a BEE consortium headed by former Department of Communications director-general Andile Ngcaba, who left government employ in January. Ngcaba will also be DiData SA`s chairman designate for the next 12 months and will replace the current incumbent Peter Hird.
The JSE dealer says the market is awaiting more details about the deal and until then is not giving any sign of approval.
A JSE IT sector analyst echoes that sentiment: "The devil will be in the detail of the deal."
He says there are four criteria that make a good BEE deal. It means a credible partner has to be found, create value, have operational involvement, and the current shareholders may not be disadvantaged.
"So far the announcement of the deal does not expand on any of those points," he says.
The analyst and the dealer say they are hoping that more details will be made available when DiData releases its interim results within the next month.
Related story:
Ngcaba to head DiData`s BEE consortium
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