A number of mergers and investments, as well as Q2's first earnings reports, set the tone in the telecoms sector last week. The winners included Turk Telekom (+5.8%), Rostelecom (+5.5%), Intelsat (+5.4%) and Altice Europe (+5.4%). That could however not prevent the Telecompaper Stock Index European Telecoms Service ending week 29 down 1.4 percent, lagging the EuropStoxx 50 (-0.5%). Several German shares were the biggest losers, including 1&1 Drillisch (-13%), United Internet (-10%) and Tele Columbus (-7.7%).
M&A
Vodafone (-1.8% for the week) received approval for its takeover of Liberty Global (+1.8%) units in Germany and Eastern Europe. Telenor (-2.8%) was allowed to take a majority stake in Finnish DNA (-0.1%).
Divestments were conducted by BT (-1.6%), selling its London headquarters, and DNA, selling its DTT unit. OTE (-0.8%) announced a special dividend after the sale of its Albanian subsidiary. Altice Europe (+5.4%) was reported to be struggling to find a buyer for its Portuguese fibre network. Telecom Italia (TIM, -2.0%), according to reports, was considering asset sales worth up to EUR 2 billion.
Earnings reports were published by:
In the year-to-date view, we notice a couple of things:
- Several German shares are suffering most, of all European telecoms stocks, notably 1&1 Drillisch (-40%), Tele Columbus (-38%), Telefonica Deutschland (-35%) and United Internet (-32%).
- A number of takeover candidates unsurprisingly perform well, including Greek Forthnet (+107%), KCom (+64%), Zayo Group (+47%), Italian Go Internet (+43%) and DNA (+23%). KPN (+2.3%) is falling behind in this list, suggesting mounting doubts over the possibility of an offer for the company.
- BT is by far the weakest incumbent, down 21 percent since the end of 2018. Turk Telekom is the strongest, up 44 percent.
- All infrastructure shares (fibre, towers, data centres) in our index are up YTD.
