Telkom shares fell further yesterday on speculation that the government would sell some of its 40% stake to raise money with which to prop up Eskom.
Telkom dropped 4.7% to R55.50, extending its slide over the past two days to 9.5%, the most since September 2012.
The Treasury said earlier this week that it would dispose of "non-strategic" assets to generate capital for Eskom, which is struggling to plug a funding deficit as it races to build new power stations and alleviate electricity shortages.
"Telkom was flagged definitely as an asset the government might sell," Owen Nkomo, head of Inkunzi Investments, said yesterday.
"Someone was aggressively selling and there is the possibility of an overhang" of Telkom shares if the state disposes of its holdings.
The government rescue package for Eskom includes a capital injection and an increase in government-guaranteed debt, Finance Minister Nhlanhla Nene said on Monday without giving details.
The power utility has a R225-billion shortfall in funding over the five years to March 2018.
The sale of some Telkom or Vodacom stock is "a very viable option" for the government and something that has been considered before, Mark Rosenberg, Africa director at Eurasia Group, New York, said.
"They need to find the money somewhere."
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