Reuters: Global Markets: Deutsche Telekom dividend cut talk hits sector

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Deutsche Telekom dividend cut talk hits sector Nov 2nd 2012, 11:32 Tweet Share this Email Print Related News Telefonica prices German sale in lower half of range Mon, Oct 29 2012 Telefonica narrows price range for German IPO: sources Fri, Oct 26 2012 UPDATE 3-France Telecom slashes dividend as price war bites Thu, Oct 25 2012 UPDATE 2-Dutch KPN's mobile pain shifts to Germany Tue, Oct 23 2012 UPDATE 2-Telefonica Germany to benefit from tax credits Wed, Oct 17 2012 Analysis & Opinion This election, Obama is the wiser economic choice Why do investors prefer Amazon to Apple? Related Topics Hot Stocks » Asian Markets » The logo of Deutsche Telekom AG is seen outside the company's headquarter in Bonn May 24, 2012. Credit: Reuters/Wolfgang Rattay Fri Nov 2, 2012 7:32am EDT Shares in Deutsche Telekom (DTEGn.DE) are down 3 percent, topping the FTSEurofirst 300 fallers list, after German newspaper Handelsblatt reports the firm could cut its 2013 dividend by up to a third in a potential fresh blow to the once high-paying sector. "Clearly, the article fuels fear about a dividend cut to 0.50 euros or below down from 0.70, which appears dramatic," says Adrian Pehl, analyst at Equinet Bank. "What is more important for us is the aspect that investors might be most likely getting the benefit of an improved customer development when investments are ramped-up," he adds. Deutsche Telekom shares are down 3 percent so far this year, outperforming the sector .SXKP which is down 7.5 percent. Dividend concerns filtered through into the rest of the sector, where Telefonica (TEF.MC) and France Telecom (FTE.PA) have already slashed payouts. Dutch peer KPN (KPN.AS) fell by as much as 1.65 percent to 10-year lows. "The Deutsche Telekom story gives room for speculation over KPN's dividend or even a capital raising because of the group's debt covenants," an Amsterdam based trader says. KPN kept its 2012 payout target of 0.35 euros per share when announcing its third-quarter results, though its net debt increased to 2.7 times core profit, exceeding its target of 2.5 times. Reuters messaging rm://harro.tenwolde.thomsonreuters.com@reuters.net Reuters messaging rm://robertjan.bartunek.thomsonreuters.com@reuters.net Related Quotes and News Company Price Related News Tweet this Link this Share this Digg this Email Reprints Comments (0) This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

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