It was (mostly) a bleak 2019 for JSE-listed technology shares - TechCentral

It was (mostly) a bleak 2019 for JSE-listed technology shares

Only six of 26 listed South African technology shares managed to eke out a gain in 2019, with Cartrack Holdings leading the pack with a 69.4% improvement over the year.

TechCentral’s annual review of share price performances of JSE-listed technology companies shows that Cartrack, Altron, Mustek and Datatec all turned in strong performances in 2019, but these were the exception rather than the rule. (See the table below for the full list.)

Second-placed Altron rose by 28.3% to end the year at R23.10. Over three years, Altron is the best-performing counter on TechCentral’s list, adding 167.1% to shareholder wealth, as the turnaround led by CEO Mteto Nyati continues apace.

The annual list excludes dividends shareholders received, and is purely a reflection of share price performance.

Technology distributor Mustek continued a three-year winning streak, adding another 22.9% in 2019, bringing its returns since the beginning of 2016 to an impressive 90.6%. Recent share purchases by CEO David Kan suggest management is optimistic for a solid 2020, too.

The only other two shares to end the year in the green were Net1 UEPS Technologies, up 2.6% (but down 68.1% over three years) and Reunert up 2.5% (up 6.2% since January 2016).

The rest of the 2019 list is splashed in red ink.

The worst performer last year was the scandal-plagued Ayo Technology Solutions, which plunged 84.8%, while both EOH (down 59.3%) and Blue Label Telecoms (down 52.3%) also had a terrible year. EOH has sold down by 92.3% over three years (the worst of all the companies), while Blue Label is down 85.8%.

EOH, Blue Label battered

EOH was battered at the start of the year when Microsoft pulled the plug on its partner agreement with the company following a whistle-blower report into alleged malfeasance involving a government contract. Blue Label has suffered for its R5.5-billion investment for 45% of the troubled mobile operator Cell C. Though Cell C apparently made good progress in turning around its fortunes in the second half of 2019, including signing an expanded roaming agreement with MTN South Africa, Blue Label’s share price is yet to recover with investors taking a wait-and-see approach.

Telecommunications shares generally had a bad 2019, with Telkom — despite a surge in the first half of the year that took its share price to R100 — ending the year down 45%. Over three years, Telkom is off 52.9% as investors fret over its ability to compete on a financially sustainable basis with Vodacom and MTN in mobile and over growing competition that is threatening its fixed-line business.

Vodacom ended the year down 12.7%, while rival MTN was off 7.3%.

Source: TechCentral research. List excludes broadcasting companies

The biggest company in the list, Naspers, ended 2019 down 18%, though this number is not comparable given the decision to unbundle its international Internet assets into the European-listed Prosus, which has a secondary listing on the JSE.  — (c) 2020 NewsCentral Media

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