Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Vodafone Share Price Continues Bullish Run

By CMC Markets (David Madden)Stock MarketsNov 11, 2019 07:14
uk.investing.com/analysis/vodafone-share-price-continues-bullish-run-200434143
Vodafone Share Price Continues Bullish Run
By CMC Markets (David Madden)   |  Nov 11, 2019 07:14
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

Vodafone’s share price jumped in late July after the group announced plans to sell-off the European mobile mast business via a stock market floatation, which could raise as much as €20 billion.

The group aims to spin off the unit in the first half of 2020. Vivek Badrinath, the head of Vodafone’s rest of the world division, has been named as CEO of Tower Co – the new company.

Vodafone (LON:VOD) plans to pay down debt

The cash raised from the planned disposal will be used to pay down Vodafone’s debt. The telecoms giant racked up debt due to the acquisition of Liberty Global’s cable network in central and eastern Europe. Heavy investment in 5G in Italy as well as Germany also added to the firm’s liabilities. Long-term debt is in excess €48 billion.

Vodafone (LON:VOD) revealed a tie-up with Telecom Italia (MI:TLIT) Group in relation to 4G and 5G. The network sharing partnership is mutually beneficial as it should deliver faster 5G, at a lower expense, over a larger area. The move should equate to cashflow gains of at least €800 million over the decade.

Vodafone share price hit by dividend cut

In May, the company cut its dividend for the first time, as a way of addressing the debt situation. As expected, the announcement put pressure on the Vodafone (LON:VOD) share price. It’s never a good look when a group has to lower its returns to investors as it shows weakness, but nonetheless, it was a prudent step. Over the years too many companies have tried to keep the market sweet by maintaining a dividend, but failed to address debts which were building up at the same time.

In July, BT suggested it was considering cutting its dividend to assist with the costs of expanding the fibre optic network in the UK. This despite the group maintaining its full-year dividend when it revealed its annual numbers two months ago. BT also said it is exploring other options like cost-cutting as well as increasing borrowing.

Heavy investment weighs on industry

The sector as a whole seems to be suffering under the weight of such heavy investment, and the tough competition is keeping margins under pressure. Consumers are savvier these theses as there is evidence that people are lowering their outgoings, and price comparison sites are making it easier to scout out deals.

BT’s share price (LON:BT) took a knock last week after Virgin Media announced it was dropping its BT contract for a Vodafone (LON:VOD) agreement. The contract will run for five years and it will provide 5G as well as other services to 3 million clients. Oddly the news had little impact on Vodafone’s share price, but seeing as Vodafone pipped BT for the contract, it suggests the group is doing something right.

Vodafone’s share price could be volatile this week as the company releases its first-half numbers on Tuesday.

DISCLAIMER: CMC Markets is an execution only provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed.

No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.

Original Post

Vodafone Share Price Continues Bullish Run
 

Related Articles

Vodafone Share Price Continues Bullish Run

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The inherent concept of such investments means that they are not suitable for the investor seeking income from such investments, and are only suitable for those who have the required experience and understand the market risks. You should carefully consider your investment objectives, level of experience, and seek advice from an independent financial advisor if you have any doubts.
Continue with Google
or
Sign up with Email