The position as far as Deutsche Telekom’s 12% stake in BT Group, which it was free to add to at the beginning of this year, seems to be a case of one plus one equalling three. This is particularly the case given the share price slide we have seen for much of 2019, and the recent dip below 200p.
It should and perhaps still could be the case that DT finally decides to double down on its stake bought at over double the present share price, and consolidate its position as a pivotal European telco as we enter the age of 5G communications. Indeed, one can say, if it does not seek to make M&A moves on BT, it will continue to be sitting on dead money.
Even with all the recent angst surrounding BT – the Italian scandal, competition issues with the regulator, and dividend fears, the shares do appear to be in the value zone, if not an area for contrarians.
From a technical perspective, in the near term the situation looks to be all about the former May 2018 support at 201p. While above this the stock is in a bear trap position, so that while this holds former March to May resistance around 230p looks to be the target for the stock.