Friday, January 2, 2009

How major telcos performed in 2008?

MAJOR telecommunications companies' share price took a heavy beating in 2008, as investors are not-so-gung-ho over some companies' expansion plans as well as earnings growth potential.

This is how they performed in 2008:

1. China Mobile: fell 43.58 per cent to HKD77.80. It was HKD137.90 early 2008.
2. Vodafone Group Plc: fell 25.98 per cent to 139 pence. It was 187.8 pence beginning 2008.
3. Telefonica SA: fell 28.67 per cent to 15.85 Euros. It was traded at 22.22 Euros early 2008.
4. Deutsche Telekom AG: down by 29.4 per cent to 15.3 Euros. Traded at 21.67 Euros early 2008.
5. France Telecom SA: declined by 18.93 per cent to 19.96 Euros, against 24.62 Euros early 2008.
6. Bharti Airtel: decreased by 28.2 per cent to 715.5 INR, against 996.4 INR early 2008.
7. Singtel: down by 36.25 per cent to SGD2.55, against SGD4.00 early 2008.
8. Hutchison Telecommunications International Ltd: Fell by 82 per cent to HKD2.08, against HKD11.72 early 2008. (The decline also due to the HKD7.00 special dividend declared on November 12)
9. Telenor ASA: down by 63 per cent to 46.3 Kroners, against 129.75 Kroners early 2008.
10. TM International Bhd: down by 53 per cent to RM3.62, against the opening price of RM7.85, when it listed in April 2008.

1 Comment:

Gopal Raj Kumar said...

as is the case with many companies and the decline in their share prices following the so called economic meltdown of last year (2008), much of it is the result of the speculative element overhang over the underlying real value of their companies that is being eroded by public sentiment rather than because of a drop in their businesses alone.

There were warning bells ringing loud and clear more than 24 months back when the so called sub primes (read junk bonds) had gathered a full head of steam. And steam it was much like the froth on a head of beer. You get the air that is impressive in bubbles and little of the substance when you really dip into the drink.

Telco's still have a great future especially in countries like China, India and of course Indonesia. The reasons are simple.

People in these places where regulation is still largely unenforceable will find illegal alternatives if their governments do not provide the infrastructure quickly and cheaply enough to satisfy their communication needs in support of education, news, business transactions and entertainment.

To create the infrastructure in these places is cheap and the economies of scale are exceedingly good. Long term returns to tax coffers are also too attractive for government to ignore unless governemtns are short sighted and dumb.

Illegal alternatives are like piggy back devices already prevelent and common in India and China. Trading was born in these nations and they wait for no man nor their political agendas.

Piggy back devices rob legitimate providers of previous valuable revenue but the illegal operators are also protected by politicians they put in place with their booty as is the case in India and China (local regional administrators).

A good Telco is one that is innovative, has relatively small overheads, has the capacity to identify outsourceable elements of its business locally and provide state of the art technology with utility over accessory value.

People with such capacity engage good lawyers and finance professionals to work with them in identifying opportunities where they occur.

We are one such group;

Quintin Rozario


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