Telstra shares near $5 mark
The telco's shares have surged 11 per cent since the Coalition announced its plan to build a cheaper version of the national broadband network. Most important for Telstra investors, the Coalition promised Telstra was still in line to receive an $11 billion windfall for disconnecting its copper network.
The telco's performance looks even stronger over nearly two years. Its shares hit a historic low of $2.56 in mid-November 2010, but closed at $4.98 on Tuesday - an increase of 94 per cent for those who caught the stock at the bottom.
The surge comes as Telstra is expected to unveil its much-anticipated 4G subscribers number on Wednesday. In a flat mobile market, Telstra is the only carrier making headway in signing up new subscribers.
Investors are flocking to Telstra shares as a safe haven given recent volatility in equity markets and especially after the dramatic collapse of the gold price. Some analysts say many are buying Telstra shares as a proxy high-yielding bond.
Indeed, shareholders are attracted to Telstra's steady flow of dividends, now 28¢ a share.
However, brokerage UBS has questioned whether Telstra shares can increase further. "We believe further share price appreciation is limited. A more rational pricing environment, market share momentum, cost out and 4G upside are now priced in," UBS analyst Richard Eary said.
Telstra is outpacing rivals in rolling out 4G and is expected to cover 66 per cent of the population by June. The telco is set to take advantage of an explosion in data traffic.
Frequently Asked Questions about this Article…
Telstra shares rallied after the Coalition announced plans for a cheaper version of the national broadband network and confirmed Telstra could receive an $11 billion payment for disconnecting its copper network. The share price was also helped by momentum from Telstra's 4G rollout and investors buying the stock as a safe haven amid recent market volatility.
Telstra closed at $4.98 on Tuesday, which the article says is a 94% increase from the historic low of $2.56 in mid‑November 2010. The stock has also been described as one of the best‑performing blue‑chip stocks on the ASX so far this year and had surged about 11% since the Coalition’s broadband announcement.
According to the article, the Coalition promised that Telstra would still be in line to receive an $11 billion payment for disconnecting its copper network as part of plans to build a cheaper national broadband network.
Telstra is outperforming rivals in rolling out 4G, is expected to report its 4G subscriber numbers, and is the only carrier making headway signing up new mobile subscribers in a flat market. The company is expected to cover 66% of the population by June, which positions it to benefit from growing data traffic.
Investors have been attracted to Telstra for its steady dividend payments (28 cents a share) and relative stability amid recent equity market volatility and the collapse in the gold price, leading some to buy the stock as a high‑yield alternative to bonds.
UBS analyst Richard Eary told the article that further share price appreciation may be limited because a more rational pricing environment, market share momentum, cost reductions and 4G upside are already priced into Telstra’s shares.
The article states Telstra’s dividend is 28 cents a share. That steady flow of dividends is attracting income‑seeking investors who view the stock as a reliable income source amid market uncertainty.
The article says Telstra is the only carrier making headway signing up new subscribers in an otherwise flat mobile market and is outpacing rivals in rolling out 4G coverage, targeting around 66% population coverage by June.
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