MTN GROUP LTD
STILL BESET WITH l abour disputes, MTN Group, which is experiencing its f i rst strike i n South Africa since i ts launch in 1994, has bared the brunt of a disgruntled workforce. Its share price has plunged and customers are being turned away due to a shortage of mobile phones. Low pay, insufficient weekend remuneration and a lack of transport money are key reasons why hundreds of MTN staff from the call centres and service branches hit the streets.
The initial demand was for a 10% pay raise, a bonus of 16% of their annual salaries, and the termination of “unfair” labour practices and the use of labour brokers. Workers also demanded a task team be appointed to determine which employees have been short-changed by salary adjustments. MTN has offered an 8% performance- r el ated pay r i se, postponed its annual half- marathon charity run (planned for 13 June), citing security risks posed by the strike, and expanded its Rush Hour bundles (access to 100MB of data for one hour at R10).
Although negotiations are ongoing, MTN has lost a significant amount of its share value and, frankly, this strike saga is now old news. Which means the result should be priced in.
A new buying opportunity is waiting above 22 300c/share, with a potential 100% retracement to the 25 000c/share prior high. Positions could be increased above 23 800c/share if resistance is not encountered, or else a stop loss must be carefully monitored. The secondary target would be situated at 27 000c/ share. A reversal below 21 100c/share, from current levels, would negate this near-term bullish call.