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, according Telecompaper. 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 center 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%). Russian 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.
