MTN down after Absa Capital note

Johannesburg - Shares of Johannesburg-listed African mobile giant MTN Group edge lower after Absa Capital says it likely lost revenue share to Vodacom in South Africa.

“Expect 3Q13's market share dynamics to continue into 4Q13, with MTN losing service revenue share to Vodacom,” the bank says in a note to clients.

The JSE is seen in this file photo: Leon Nicholas. Credit: INDEPENDENT MEDIA

“At current (high) valuation levels, we do however see the regulator's pending MTR decision presenting downside risk.”

Investors are concerned South Africa's regulator will give the nod to lower mobile termination rates (MTR) - what telecoms pay one another to connect calls - also negative for MTN.

However, Absa Capital raises its price target to 222 rand from 210 rand and maintains its “overweight” rating for MTN, Africa's biggest telecom, but No. 2 in its home market behind Vodacom.

MTN shares are down 1.8 percent at 211.05 rand, lagging behind a 0.24 percent decline by the Top-40 index. - Reuters