MTN Zakhele BBBEE shares are on the rise

MTN Zakhele shares have bounced back to touch a high of R97.00 last week which can be taken as a reflection of a view that there is ample space for upward movement in this BBBEE scheme.

MTN Zakhele shares closed at R91.00 on Friday, the 14th of February 2014. Initial investors of the scheme established in 2010 are laughing all the way to the bank if they are sellers at this moment. These investors came into the scheme at about R20 per share which means that they have realised more than 300% appreciation in their money.

There seems to be plenty of buyers who are of the view that there is considerable value still to be had in the MTN Group BBBEE scheme.

MTN Zakhele opened for trading on the 25th of November 2013. The trading platform encountered problems and had to be suspended two days after launch. Trading was resumed on the 29th of January 2014 with the share price tracing the R85 mark. The share price has since appreciated to touch a high of R97.00.

The latter mark is still way below MTN Zakhele’s net asset value which is estimated to be between R120.00 and R150.00. The value of the scheme at maturity could reach higher levels depending on the performance of the underlying asset.

MTN Zakhele is invested telecoms giant MTN Group. The scheme was established in 2010 and assumed about 4% of MTN Group shares.

The positioning of MTN Zakhele at MTN Group level is considered as a big advantage when compared to other schemes of this nature. The comparables will be Vodacom’s Yebo Yethu and Nasper’s Welkom Yizani. These schemes are only exposed to the relatively matured South African markets and not to the companies’ Africa wide operations.

Having said that it is important to note there is no direct relationship between the JSE share price of MTN Group and the share price of MTN Zakhele which is listed onj an over the counter platform and has limited trading.

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