Shares of South African fixed-line operator Telkom SA rise 3.4 percent to 18.77 rand as investors bet the long-suffering stock may have fallen too far in recent sessions, and on speculation the government could pay a premium if it decides to nationalise the company again.
Shares of Telkom are down 38 percent this year, making it the fifth-worst performing stock on the Johannesburg All-share index. It is also near its lowest since late 2003.
The ruling African National Congress has been discussing a potential nationalisation of Telkom, although nothing has been decided.
“If there's going to be a buy back of the stock, obviously there's going to be a minority take out as well, which is obviously is going to be at a premium,” says Thys van Zyl, a trader at Thebe Stockbroking.
South Africa on Tuesday fined Telkom a lighter-than-expected 449 million rand ($55 million) for using its dominant market position to “bully” potential competitors. The fine, although hefty for the struggling company, is much well below the 3.5 billion rand originally sought by the government's competition watchdog. - Reuters