Flash Briefing: Telkom’s shift in focus bears fruit; Ramaphosa goes slow; Naspers’ Tencent; Aspen chill

By Jackie Cameron

Here is today’s Biznews Flash Briefing:

• Telkom was a big mover on the Johannesburg Stock Exchange. Its share price jumped nearly 14% to an all-time high of just over R98 per share after it released its Group Provisional Annual Results for the year ended 31 March 2019. Investors also like Telkom’s plan to increase revenue away from its core, fixed-line business. As reported on BizNews, Telkom CEO Sipho Maseko says Telkom will build more mobile network towers as it moves away from its core, fixed-line business. Telkom is looking for an equity partner to fund this strategy and may also sell some of its properties to raise cash.
• Other JSE stocks that gained in value on Monday included Pioneer Foods, which rose about 4%, and Sappi, which gained about 2.5%. Losers of the day included pharmaceuticals company Aspen, which shed about 4.5%.  Aspen has been trading under a cautionary announcement. Last week it revealed that has been in talks with a potential partner in Europe after announcing in March a strategic review of its European and domestic commercial pharmaceuticals businesses. Aspen has been selling assets after reporting low earnings growth in the last six months of 2018. It’s share price plummeted 30% in March and has not recovered since then.
• The big political story on Monday set out likely candidates for deputy president. With President Cyril Ramaphosa’s inauguration over, the focus is on who he will appoint to his new cabinet. Besides having to appease opposing factions within the ANC, Ramaphosa has to think about keeping the party’s allies happy – these include the the South African Communist Party and the Congress of South African Trade Unions. President Ramaphosa’s spokesperson said on Monday that he wants more time to “apply his mind” to cabinet appointments. Investors are hoping President Ramaphosa will send a strong signal that he can really turn around the South African economy through his choices.
• In global news, Chinese technology stock Tencent suffered a blow as one of its big investments, China Literature, continued to fall in value. Africa’s largest media group, Naspers, owns a large stake in Tencent. China Literature has dropped more than 70% from a record high reached shortly after its debut in November 2017. The Chinese government has cracked down on China Literature and related companies in connection with spreading “vulgar and pornographic information”. China has stepped up efforts to clean up its Internet sphere, with its suspension of game license approvals knocking stocks in the tech and related sectors.
• As The Wall Street Journal reports: Global stocks gained Monday after voters in European Union parliamentary elections showed broad but more fragmented support for pro-EU parties, while populist factions gained less ground than expected. Also benefiting from an improvement in the Euro was the rand, which closed at R14.44 to the greenback on Monday afternoon.