Keeping faith alive
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.