Vodacom Shares Soar on South African Stock Listing

A court in South Africa ruled late last night that Vodacom could proceed with its planned stock-market listing on the Johannesburg Stock Exchange that was in jeperdy following a regulator decision at the last minute.

The share price following its debut this morning climbed as much as 9 percent to 64.95 rand after opening trade at 59.50 rand, although it fell back slightly later. At 10am, the share price was 63 rand - giving the mobile network operator a stock market valuation of 94 billion rand (US$10.9 billion).

The listing was thrown into doubt at the weekend when the telecoms regulator decided to reverse an earlier decision and refer Vodafone's purchase of a 15% stake in the firm to public consultation. Vodafone's investment was conditional on the remaining 35% stake being split off from its owner, Telkom and listed separately.

The South African Rand dropped three percent against the US Dollar on Friday, which was put largely at the door of the regulator's sudden and unexpected change of mind. The regulator's decision has raised concerns about the new Jacob Zuma lead government's attitude to business, especially as the unions, who backed Zuma were the lead opponents to Vodafone taking control of Vodacom. The Cosatu union has vowed to call for a boycott of Vodacom products in protest at the sale of the controlling stake to Vodafone.

Vodacom is due to release it's annual earnings tomorrow (Tuesday).

Posted to the site on 18th May 2009