Allied Technologies Ltd., a maker of pay-television set-top boxes, fell to a nine-year low after suspending dividends for the first time, the worst performing stock on the FTSE/JSE All-Share Index over the past week.
The shares have slumped 18.5 percent since the company said on April 24 it would not pay a full-year dividend to conserve cash resources. They fell as much as 6 percent to 30.01 rand today, the lowest level since March 2004, and were down 2.9 percent by 11:45 a.m. in Johannesburg.
“They had a big track record of being a dividend payer, and income funds likely had a knee-jerk reaction to this,” Dirk Noeth, an analyst at Avior Research (Pty) Ltd., said by phone from Cape Town today.
Altech, as the Johannesburg-based company is known, is 56 percent-owned by Allied Electronics Corporation Ltd. The two companies are run by brothers Craig and Robert Venter. Allied Electronics is probably in talks with Altech about taking full control of the company, analysts said last month.
Altech’s 14-day relative strength index is below 30 for a second day. A reading below 30 signals to technical analysts that a security is undervalued and poised to rebound.