The rise and fall of Amalgamated Telecom Holdings Limited, Fiji’s giant telco
by Dionisia Tabureguci
There is little doubt that Amalgamated Telecom Holdings Limited (ATH) is one of the biggest companies in Fiji with total assets of over $300 million, six subsidiary companies and annual net profit after tax averaging $45 million in the last five years.
And when it comes to companies listed on the South Pacific Stock Exchange (SPSE), ATH is also massive, sometimes making up over 50 per cent of total market capitalization.
A small movement in its share price for instance can have such a huge impact on the market index that it is not unusual for the index to drop if the day’s trading sees a fall in ATH share price despite a good share price performance by other listed companies.
ATH listed on SPSE in 2002 following an intense publicity drive only mildly dented by bad publicity concerning the offloading of 49 per cent of Government’s 100 per cent shareholding in the company to the Fiji National Provident Fund in 1998 at $1.26 per share.
That sale was followed by the FNPF buying an additional two per cent in 1999 giving it a controlling stake in ATH.
In 2002, the Government again decided to sell off another portion and embarked on a private placement that would then lead to an initial public offer finally readying the telecommunication giant for listing.
The private placement saw the participation of six institutions that altogether took up 9.71 percent of total issued shares at $1.06 per share.
Two weeks before the April listing date, the Government launched its IPO, offering 3.6 percent (or 15 million shares) to the Fiji public at an offer price of $1.06 per share.
The public response was described as “very good” and the offer closed fully subscribed.
SPSE listed ATH on April 18, 2002 with 422.1million shares quoted. On its first day at the market, 13,000 ATH shares were traded. By itself, the listing of ATH was described as a watershed event. Market advocates hoped it would provide the much-needed catalyst to increase public awareness on share market participation.
But as the years passed, it became evident that some were a little overoptimistic about the company’s role in stimulating the market. SPSE’s chief executive Sanjay Sharma once remarked - when ATH share price fell below the offer price for the first time - that ATH’s impact was not as effective as the expectations were.
ATH spent its first trading day climbing from $1.12 per share to $1.13 and finally closing at $1.14. It continued a buoyed performance throughout the year with its share price anchoring at $1.14 and $1.15 then culminating to an all time high of $1.17 in early November 2002.
The schedule of unexecuted orders (a log of pending buy and sell orders) was filled with buy orders for ATH shares, some offering to buy at as high as $1.15 per share. Sellers were willing to sell at up to $1.19 per share. But this level of optimism did not last very long. By late 2002, dust was flying in Fiji’s telecommunications industry when the entry of an obscure American company Telephone Pacific Ltd (Telpac) selling cheap callback service, ruffled up feathers and caused a stir among concerned stakeholders. The situation, provoked by a not-so-telecom-savvy media, snowballed into a bitter public war of words between the regulator and Telpac, then made its first direct impact at the market on March 10, 2003, when ATH shares experienced its first major fall in price from $1.14 to $1.10 per share.
On May 19, 2003, at the height of the Telpac issue, 1000 ATH shares changed hands at $1.05 per share. It was an important historical low because, for the first time, ATH had traded below the offer price of $1.06. The market held its breath. Was optimism waning? Market analysts were wrought with worry over how this could tilt investor confidence to a negative perspective and discourage the premature investing public.
Sellers lined up and the level of optimism had indeed somewhat waned, judging from the looks of the unexecuted order schedules. ATH spent the rest of 2003 constantly struggling to regain a level footing at $1.06 while the unexecuted order schedule saw investors trying to rid themselves of the stock, most offering to sell at $1.06 and transactions taking place at $1.05. By early December 2003, the ATH share price was sliding, settling at as low as $1.03 per share on December 15, 2003 and spending a bleak Christmas and New Year fluctuating between $1.04 and $1.05 per share. Clearly, some investors were looking at the investment as a loss that they must minimize.
On March 16 2004, ATH shares touched another historical low after 1000 were traded at $1.02 per share. The market view then on ATH share price performance was divided, with some believing it had finally bottomed out and that it was on its way to a firm recovery. One broker believed things would get worse judging from sentiments expressed by investors. Another view was more conservative, noting that much depended on how ATH would be placed when the new set of telecommunications legislation comes into being.
But the rest of 2004 did prove the first group right to some extent. ATH shares recovered steadily after its June announcement of a $42million after tax profits. It then climbed to $1.07 in August and $1.09 in September, touching $1.10 in October.
In early February 2005, it had slid again to $1.04 per share. As the adage goes, only time will tell whether investors would be kicking themselves or patting themselves on the back for chalking ATH into their investment portfolios.
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NOTE: This article was published in the Fiji Business Magazine as: How the giant telco performs at SPSE. Subtitle: Only time will tell whether investors will be kicking or patting themselves; p.12, March 2005.
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by Dionisia Tabureguci
There is little doubt that Amalgamated Telecom Holdings Limited (ATH) is one of the biggest companies in Fiji with total assets of over $300 million, six subsidiary companies and annual net profit after tax averaging $45 million in the last five years.
And when it comes to companies listed on the South Pacific Stock Exchange (SPSE), ATH is also massive, sometimes making up over 50 per cent of total market capitalization.
A small movement in its share price for instance can have such a huge impact on the market index that it is not unusual for the index to drop if the day’s trading sees a fall in ATH share price despite a good share price performance by other listed companies.
ATH listed on SPSE in 2002 following an intense publicity drive only mildly dented by bad publicity concerning the offloading of 49 per cent of Government’s 100 per cent shareholding in the company to the Fiji National Provident Fund in 1998 at $1.26 per share.
That sale was followed by the FNPF buying an additional two per cent in 1999 giving it a controlling stake in ATH.
In 2002, the Government again decided to sell off another portion and embarked on a private placement that would then lead to an initial public offer finally readying the telecommunication giant for listing.
The private placement saw the participation of six institutions that altogether took up 9.71 percent of total issued shares at $1.06 per share.
Two weeks before the April listing date, the Government launched its IPO, offering 3.6 percent (or 15 million shares) to the Fiji public at an offer price of $1.06 per share.
The public response was described as “very good” and the offer closed fully subscribed.
SPSE listed ATH on April 18, 2002 with 422.1million shares quoted. On its first day at the market, 13,000 ATH shares were traded. By itself, the listing of ATH was described as a watershed event. Market advocates hoped it would provide the much-needed catalyst to increase public awareness on share market participation.
But as the years passed, it became evident that some were a little overoptimistic about the company’s role in stimulating the market. SPSE’s chief executive Sanjay Sharma once remarked - when ATH share price fell below the offer price for the first time - that ATH’s impact was not as effective as the expectations were.
ATH spent its first trading day climbing from $1.12 per share to $1.13 and finally closing at $1.14. It continued a buoyed performance throughout the year with its share price anchoring at $1.14 and $1.15 then culminating to an all time high of $1.17 in early November 2002.
The schedule of unexecuted orders (a log of pending buy and sell orders) was filled with buy orders for ATH shares, some offering to buy at as high as $1.15 per share. Sellers were willing to sell at up to $1.19 per share. But this level of optimism did not last very long. By late 2002, dust was flying in Fiji’s telecommunications industry when the entry of an obscure American company Telephone Pacific Ltd (Telpac) selling cheap callback service, ruffled up feathers and caused a stir among concerned stakeholders. The situation, provoked by a not-so-telecom-savvy media, snowballed into a bitter public war of words between the regulator and Telpac, then made its first direct impact at the market on March 10, 2003, when ATH shares experienced its first major fall in price from $1.14 to $1.10 per share.
On May 19, 2003, at the height of the Telpac issue, 1000 ATH shares changed hands at $1.05 per share. It was an important historical low because, for the first time, ATH had traded below the offer price of $1.06. The market held its breath. Was optimism waning? Market analysts were wrought with worry over how this could tilt investor confidence to a negative perspective and discourage the premature investing public.
Sellers lined up and the level of optimism had indeed somewhat waned, judging from the looks of the unexecuted order schedules. ATH spent the rest of 2003 constantly struggling to regain a level footing at $1.06 while the unexecuted order schedule saw investors trying to rid themselves of the stock, most offering to sell at $1.06 and transactions taking place at $1.05. By early December 2003, the ATH share price was sliding, settling at as low as $1.03 per share on December 15, 2003 and spending a bleak Christmas and New Year fluctuating between $1.04 and $1.05 per share. Clearly, some investors were looking at the investment as a loss that they must minimize.
On March 16 2004, ATH shares touched another historical low after 1000 were traded at $1.02 per share. The market view then on ATH share price performance was divided, with some believing it had finally bottomed out and that it was on its way to a firm recovery. One broker believed things would get worse judging from sentiments expressed by investors. Another view was more conservative, noting that much depended on how ATH would be placed when the new set of telecommunications legislation comes into being.
But the rest of 2004 did prove the first group right to some extent. ATH shares recovered steadily after its June announcement of a $42million after tax profits. It then climbed to $1.07 in August and $1.09 in September, touching $1.10 in October.
In early February 2005, it had slid again to $1.04 per share. As the adage goes, only time will tell whether investors would be kicking themselves or patting themselves on the back for chalking ATH into their investment portfolios.
---
NOTE: This article was published in the Fiji Business Magazine as: How the giant telco performs at SPSE. Subtitle: Only time will tell whether investors will be kicking or patting themselves; p.12, March 2005.
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