Vodacom’s Yebo Yethu shares have climbed up considerably over the past month to trade around R126.00 per share in what could be reflecting rising demand for the 10 years old B-BBEE share investment scheme that was set to mature and be unwinded in October of 2018. The B-BBEE scheme of the telecommunications giant is now set to be rewinded to go on for another 10 years.
Many investors who entered the scheme 10 years ago will be exiting and there will be investors who are attracted by the prospects of the next 10 years given the fact that the scheme produced a good performance over the past 10 years.
In reaching a share price of R126.00 per share, the Yebo Yethu shares are retracing a level they saw in the middle of June after they were stuck around the R70.00 per share mark for a long time. After appreciating to the R120.00 levels in June this year the shares pull back to settle just above the R100.00 per share mark. They are now back at R125.00.
The recent movement of the Yebo Yethu share price comes on the back of the approaching 2018 maturity date and the attendant positive news. The scheme was set to mature and come to an end on the 8th of October 2018. Ordinarily, the scheme would be wound up on that date and its capital distributed to investors. But Vodacom has chosen to extend it for another 10 years via injection of further capital and by graduating the scheme’s exposure from the South African operations to the group/international operations.
That has raised demand for the Yebo Yethu shares which has propelled its share price. It’s good news for investors who’ve stayed the course. Issued in 2008 for R25.00 per share, the Yebo Yethu shares started trading at R55.50 on the JSE’s BEE board on 11 August 2016. This means they have recorded growth of more than 200% from the 2008 entry price of R25.00. This return excludes the dividend set to be paid to investors on unwinding of the old deal.