Telkom: More value unlocking to come.
The company came up with an update of it’s intent to list their towers business “Swiftnet”. As part of their ongoing strategy to unlock value for shareholders as they believe Telkom’s share price and market isn’t reflective of the intrinsic value of the business. The market loved the news. The share jumped more than 15% on Tuesday at the back of the update. Telkom CEO Sipho Maseko said there’s also considerations of listing openserve and the data center businesses as well. As part of their ongoing “value unlock” strategy.
The stock sold off since the June R50 highs, declining about 27% between June and September. Violating the uptrend support line a little bit.
This news comes as the technical picture of the Telkom share price was starting to look bullish with a bullish divergence pattern. This happens when the oscillator makes a higher low, while price is making lower lows. As the stock holds the uptrend support. The stock has since risen a little over 19% at the close on 22 September.
The stock looks very bullish from a long technical picture. The value unlock strategy implementation is the catalyst the market needed to trigger a strong rally in the stock. Taking into consideration that the business to be unbundled openserve is in a growing industry. Fibre technology expanding into the townships in South Africa.