Keep­ing faith alive

Finweek English Edition - - INVESTMENT - SIMON DIN­GLE

TELKOM IS un­der­val­ued – a scan of its bal­ance sheet should lead one to this con­clu­sion. Whether or not this means you should be buy­ing Telkom is a dif­fer­ent story. As Ves­tact’s Sasha Naryshkine so ac­cu­rately put it in his news­let­ter last week: “Their in­fra­struc­ture is worth a lot more than the mar­ket af­fords to the com­pany. Or is it? Is the mar­ket wrong or right? I sus­pect that one must never ar­gue with the col­lec­tive, the col­lec­tive knows best.”

But, he adds: “As ever, we point to the 40% share­holder and its med­dling in the busi­ness. That share­holder, the Government of South Africa, seems to think that only it mat­ters, so much so that the name of the busi­ness was changed to Telkom SOC, with the SOC stand­ing for State-Owned Com­pany.”

Telkom’s in­fra­struc­ture is viewed as a key strate­gic as­set that the State should have a say in. Whether or not you agree, the track record of State med­dling has so far been detri­men­tal.

The man now at the helm is a former BP and Vo­da­com exec Sipho Maseko who has been ap­pointed group CEO. Brian Arm­strong, who was MD of Telkom Busi­ness and is now Group COO. Th­ese are, by all ac­counts, the right men for the job – and po­lit­i­cally well-ori­en­tated to pull it off.

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