Last week in telecoms: Vodafone and Orange drag on index, biggest losses at Iliad and MegaFon

Nieuws Algemeen Europa 19 MAR 2018
Last week in telecoms: Vodafone and Orange drag on index, biggest losses at Iliad and MegaFon

Two stocks stood out last week for being hit very hard: Iliad (-13%) and MegaFon (-15%). Iliad's results worried investors, as its internationalisation to Italy and Ireland appears to be on track. MegaFon also dropped on Q4 results. The best performing stocks were mobile operator Turkcell (+4.2%), after results and an upwards revision of its guidance, satellite operator SES (+4.7%) and data centre operator Equinix (+6.3%). Microcaps QSC (+4.4%) and CityFibre (+4.5%) also had a strong week.

YTD: from MasMovil's +47% to VEON's -32%

Our pan-European telecoms index closed the week down 1.1 percent, against a 0.5 percent gain for the EuroStoxx 50 index. Performance among the heavyweights was not consistent. Vodafone (-2.7%) and Orange (-6.0%) put a drag on the telecoms index, outflanking Deutsche Telekom (+1.4%) and Equinix.

Year-to-date our telecoms index (-3.6%) is behind the broader market index (-1.9%). The extremes in our basket are moving ever further away from each other. The winners include MasMovil (+47%), Intelsat (+45%) and the two stocks facing takeover offers: TDC (+30%) and Sky (+29%). The heaviest losses are for (primarily) UK stocks: TalkTalk (-30%), CityFibre (-23%), BT (-17%) and Vodafone (-14%). Russia's Veon (-32%) is the worst performer in our basket.

Uncertainty continued around TIM (-2.8%). Vivendi as a major shareholder backed off, while the activist fund Elliot demanded board changes.

Bond market activity

There was quite some activity on the bond market last week (week 11). Telefonica (+0.4%) raised EUR 5.5 billion, while MegaFon redeemed a RUB 20 billion loan. Portuguese cable/mobile operator Nos (-5.1%) meanwhile reported Q4 results and saw its ratings remain investment grade. SES raised EUR 500 million from a bond offering.

Multinationals reporting

Two multinationals reported Q4 results: Altice (+2.5%), active in France and Portugal, as well as CK Hutchison (+0.2%), operating under the 3 brand in the UK, Ireland, Sweden, Denmark and Austria. Altice also benefitted from news of the international wholesale voice business being sold. Romanian Digi (+1.9%) took another step in the internationalisation of its activities by expanding to the Spanish fixed-line market through a deal with Telefonica.

Categories:

Algemeen

Companies:

Orange,  TDC,  TIM,  Vodafone,  MegaFon,  Telecompaper,  Turkcell,  Digi,  Equinix,  Iliad,  Intelsat,  Masmovil,  Nos,  QSC,  SES

Regions:

Europa

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