Telstra: Stockbrokers extraordinary market scenes as investors dump comm giant

Telstra is the most widely held stock by small investors, partly because of its big dividend — but that is all about to change.

Telstra is the most widely held stock by small investors, partly because of its big dividend — but that is all about to change.

Key points:

• Dividends set to be cut 30pc to 22 cents per share
• Telstra’s faces NBN-induced erosion of traditional fixed-line phone, internet businesses
• Once NBN rollout is complete in 2019 Telstra will need to start investing in its business again

On Thursday, the CEO announced the dividend was to be slashed by 30 per cent, to just 22 cents per share, because of uncertainty around the telco’s financial future.

Michael McCarthy, head of market strategy at CMC Markets stockbroking, watched events unfold from his trading desk.

“Trading in Telstra this morning was extraordinary,” he said.

“It was one of those days that really draws market attention because the volumes were enormous and the price movement was huge.

“In the first seven minutes of trading more Telstra shares changed hands than it changes hands in an average day, that’s how big the trading was this morning.”

Mr McCarthy said as a market watcher the day’s trading was “fascinating”, however he had plenty of sympathy for Telstra shareholders…

Source: Telstra: Stockbrokers describe ‘extraordinary’ market scenes as investors dump communications giant – ABC News (Australian Broadcasting Corporation)