MTN's share price, which recently rocketed to an all time high, has come down to "saner" levels, says an analyst.
MTN's share price reached R75.80 this week on the back of speculation that a Chinese telecoms firm was looking to buy out the group. Following a denial by China Telecom, MTN shares started shedding gains and - by 10am - were trading at R71.
Over 60 million MTN shares have changed hands since Monday, with almost half of these being traded on Monday, which saw the price close at R73. Its highest closing price this week was on Wednesday, at R74.99, the same day it hit a high of R75.80.
The analyst says the speculation was the reason the company's price had run so hard in the last few days, but with the denial, economic fundamentals of supply and demand came into play again and the price was trading at more reasonable levels.
The analyst says he would not be surprised in someone made a bid for the company. "Where there's smoke, there's fire."
China Telecom is not the first company reported to be interested in MTN. Recent market speculation indicated Telkom might consider shedding its Vodacom stake for a percentage of MTN, which has a market capitalisation of $15 million.
The analyst notes Vodafone's impending investor day to discuss its role in emerging markets might be "interesting".
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