Telkom recovers almost 6%
SHARES in South Africa’s biggest fixed-line operator, Telkom, rose almost 6% on Friday, after falling 3.61% on Wednesday, after the Competition Tribunal imposed a fine of R449m on the company on Tuesday.
At 3.22pm, shares in the telecommunications group had gained 5.95% to R19.24. Over the last twelve months the share price has dropped 44.24%.
On Tuesday, Telkom was found guilty by the Competition Tribunal of abusing its dominance in the telecoms market between 1999 and 2004, when the company was a monopoly provider of telecoms facilities in the country.
Byron Lotter, portfolio manager at Vestact, said the move was not "news specific" and had more to do with the general volatility in the stock.
He said that when a share finds itself in the headlines, especially for the wrong reasons, the volatility of the stock will increase.
"This is because traders and momentum drivers trade the stock heavily on any further or potential news. Telkom have been down heavily over the last two days.
"The market, as it often does with bad news, has probably just overreacted and today’s gains will be some normalising taking place as investors and traders take advantage of what they see as a bargain," Mr Lotter said.
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