European telecoms shares were hammered last week, even more than the general market. Two German altnets raked up the worst losses, Drillisch and United Internet. Greek takeover candidate Forthnet was the week's winner. Year to date, our telecoms index is down 10.0 percent, versus a loss of 3.1 percent for the EuroStoxx 50 index.
Vodafone (-1.8%) performed in line with our index (-1.9%). Its Indian subsidiary was facing a delay of its merger with Idea Cellular, but in Ghana an IPO was moving forward. Vodafone Italy responded to Iliad's (-1.3%) mobile market entry with a fresh youth brand, Ho. Standard and Poor's meanwhile issued a positive report on Iliad Italy's chances, which was corroborated by a German bank.
Eutelsat (+0.8%) first reported that it was considering an offer for Inmarsat (-9.2%), but after a day backed out. BT (-0.4%) was reported to be planning the sale of its troubled Italian unit.
German and Belgian shares down
German challenger Drillisch ended the week 26 down 17 percent, responding to the lowering of its rating and price target by a German bank. Competitor United Internet was down 13 percent, but Freenet (-1.6%) was spared. Deutsche Telekom ended the week with a loss of 2.0 percent. The company provided some detail on the recent reorganisation plan for T-Systems. Tele Columbus (-2.6%) expanded its footprint with a deal with a housing corporation.
Of the larger shares in our index, Liberty Global (-8.6%) led the losers, closely followed by Proximus (-7.7%), which launched zero-rated mobile subscriptions for millennials. Orange BE was down 4.4 percent. Telenet (-0.6%) started a new share buy-back.
Greek, Russian and Turkish shares up
Greek Forthnet (+7.5%) benefited from takeover rumours and OTE (+0.6%) was up too. Veon rose 6.9 percent, and in fact all Russian shares in our index ended the week in positive territory: Rostelecom (+4.2%), MTS (+4.1%) and MegaFon (+1.1%). The Turkish shares also closed the week up: Turkcell (+5.8%) and Türk Telekom (+0.6%).
YTD: Euro telcos down 10%
Year-to-date our index is down 10.0 percent, underperforming the EuroStoxx 50 index (-3.1%). Several micro-caps (Tiscali -37%, Forthnet -28%) and small caps (Tele Columbus -36%, TalkTalk -31%) are contributing, but so are some of the large caps (Liberty Global -23%, Deutsche Telekom -10.3%). Altice (+169%), satellite stocks (Intelsat +391%, Iridium +36%) and takeover candidates (Sky +44%, Com Hem +16%) are doing quite well.
