The financial and stock market performance of selected telecommunication groups including Maltacom

Abstract

This dissertation assesses the financial and stock market performance in order to make a corporate analysis of selected telecommunication groups for the period starting 1st January 1996 and ending 31st December 2000. The telecommunication groups are the main local one, Maltacom, and five others, which are: British Telecom, Deutsche Telekom, Telefonica, Vodafone, and WorldCom. Financial analysis is carried out by the computation, comparison, analysis and interpretation of financial ratios, while Stock Market performance is evaluated by the use of fundamental and technical analyses. Comparisons of the relative share prices with indices are also made. It is found that over the period analysed, telecommunication groups have changed a great deal. While some groups have been able to improve their financial performance, that of others has deteriorated owing to various factors, most notably strong competition and heavy borrowing. The liberalisation of the telecommunications markets, and the promise of better communications technology that will in turn improve people's lifestyles has placed telecommunication groups in the limelight and given way, up to March 2000, to the rise in their share prices. However when at that point technology stock market prices began to fall, doubts starting surfacing on the future of such groups, particularly with respect to the prospects of UMTS mobile telephony. From the darlings of stock exchanges they have now ended up the opposite.