Johannesburg — AS CELLULAR giant Vodacom celebrated a successful listing on the JSE yesterday, foreign investors called for President Jacob Zuma to clarify SA's stance on foreign investment, warning that union activism could herald the start of an investor-deterring new trend.

Vodacom's listing went ahead despite a last-minute attempt by the Congress of South African Trade Unions (Cosatu) to have the high court stop it in its tracks.

Cosatu refused to back down yesterday, calling for citizens to boycott the network, and continuing with an existing application for a full legal review of Telkom's unbundling of Vodacom. The South African Communist Party supports Cosatu's calls for a network boycott.

Foreign analysts said the failure of Cosatu's bid to halt the listing was welcome evidence of judicial independence that will help to salvage SA's reputation among global investors.

But they are still highly cautious after the apparently politically motivated action almost sabotaged the multibillion-rand deal.

Economist Peter Montalto of Nomura International said investors had long looked favourably on the independence of SA's judiciary. But they were still nervous about the Zuma Cabinet, and several questions remained.

While the previous administration backed Vodacom's unbundling, there were obviously political rifts behind the scenes that could escalate. Montalto speculated that Cosatu-affiliated ministers might have undue influence on the industry regulator, which buckled under pressure and joined the bid to stop the listing so it could stage public hearings on the transaction.

If Cosatu was trying to increase its influence, the question was what it would try next, Montalto said.

"Zuma needs to stamp on this publicly in order to maintain sentiment amongst investors."

The government had to spell out its economic policies more clearly, particularly since Cosatu was still challenging the Vodacom deal.

Mike Davies of risk consultancy Eurasia Group said the debacle had created concern among his clients, who were waiting for reassurance that Cosatu's continuing agitation would not see a court try to undo the listing process later.

The rand gained 1,2% to R8,6/$ yesterday, partly reversing a 3% dip on Friday when legal action threatened the deal. Had Telkom been forced to annul its sale of 15% of Vodacom to Vodafone, the British operator would have had to repatriate the fee of R20,95bn it imported. But the rand fall, blamed largely on Cosatu, would have inflicted a foreign exchange loss of R500m.

Cosatu's action also spooked local companies that operate abroad in case foreign governments considered invoking the same protectionist measures Cosatu was demanding.

"It's very dangerous and narrow thinking," one market watcher said. "If you argue that Vodafone should be blocked from controlling Vodacom, you could easily have a backlash against local companies like MTN that operate in many countries if foreign governments applied the same ownership rules."

Vodacom CEO Pieter Uys was not overly concerned about the call for customers to defect to other networks, saying that it would be resolved. "It's all about relationships. We will sit down with whoever has issues."

First-day trading in the 35% of Vodacom that Telkom floated on the JSE was enthusiastic. The stock opened at R59,50, and peaked at R64,95, valuing the operator at R96,5bn. By the close of trade,

9,4-million shares had changed hands in deals totalling R571m.

Telkom's share price plunged from R112 to about R54 before bouncing back to R57 as a direct result of letting go of Vodacom.