Orascom Telecom Gains Most Since May on Discount to London GDRs
March 24, 2011, 8:19 AM EDTBy Alaa Shahine and Ahmed A Namatalla
March 24 (Bloomberg) -- Orascom Telecom Holding SAE, the biggest mobile-phone operator in North Africa, surged the most since May after the shares traded at a discount to their global depository receipts.
The shares rose 9.9 percent to 3.87 Egyptian pounds at the 1:30 p.m. close in Cairo. Orascom Telecom’s London-listed GDRs have gained 20 percent this month to $3.68 as of 11:48 a.m. in London, leaving the Cairo-listed shares valued at a discount of 14 percent. Egypt’s EGX30 Index tumbled 3.7 percent.
Shareholders of Russia’s VimpelCom Ltd. approved issuing shares for a merger with Wind Telecom SpA, which has a controlling stake in Orascom Telecom, on March 17. That helped create a “positive sentiment" for the shares, said Amr Elalfy, a research director at CI Capital in Cairo.
The stock is responding to the ‘‘resilient ’’ performance of the London-listed GDRs, Elalfy said. ‘‘It is also trading at some discount compared to its peers.’’
Cairo-based Orascom Telecom was valued at 5.9 times analysts’ estimates for 2011 earnings after yesterday’s close, less than half the average of 12 times for global peers, data compiled by Bloomberg showed. The stock was trading 79 percent below the average 12-month price estimate of four analysts compiled by Bloomberg.
Shareholders of VimpelCom voted on March 17 to issue new shares to complete a merger with Wind Telecom, a $6.5 billion transaction that would create the world’s sixth-biggest mobile network operator. The merger still faces opposition from VimpelCom’s largest shareholder Telenor ASA.
To contact the reporter on this story: Alaa Shahine in Cairo at asalha@bloomberg.net; Ahmed A Namatalla in Cairo at anamatalla@bloomberg.net
To contact the editor responsible for this story: Shanthy Nambiar at snambiar1@bloomberg.net
