Jan. 23 (Bloomberg) -- Orascom Telecom Holding SAE jumped for a second day on investor speculation the Egyptian mobile- phone company may be undervalued after the company split.
The shares of the Cairo-based company surged 9.9 percent, the maximum allowed, to 2.88 Egyptian pounds at 12:43 p.m. in Cairo. Yesterday, the shares were exempt from the upper limit, as they haden’t traded in almost two months due to the split. They soared 51 percent. The benchmark EGX 30 Index increased for a second day, gaining 1.9 percent.
“The stock is still seen as undervalued and there’s speculation that a lot more value will be unlocked as the Djezzy problem comes to an end,” said Ashraf Akhnoukh, senior equity sales trader at Cairo-based Commercial International Brokerage. Algeria signed an agreement with VimpleCom Ltd. to buy Orascom Telecom Holdings’local unit, Djezzy.
Shareholders approved dividing Orascom Telecom to facilitate a $6.5 billion merger between parent Wind Telecom SpA and Russia’s VimpelCom. After the split, Orascom Telecom Holding holds 58 percent of the original company’s assets, including those in Algeria, Pakistan and Bangladesh. Orascom Telecom Media & Technology Holding SAE, the split-off entity, owns the Egyptian and North Korean assets. Orascom Telecom Media shares rose 2.2 percent to 92 piasters. They tumbled 28 percent yesterday.
Orascom Telecom Holding was raised to “strong buy” from “buy” at Cairo-based CI Capital Holdings. The 12-month share- price estimate was set at 3.9 pounds.
--Editors: Claudia Maedler, Peter Branton
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