Orascom Telecom Media & Technology Holding SAE headed for the strongest advance in more than four months after Egyptian billionaire Naguib Sawiris took over as chief executive officer.
Shares of the Cairo-based company climbed 3.9 percent, the most since Aug. 5, to 1.07 Egyptian pounds at the close in the capital. Traded volume was more than double the three-month daily average. That gives the company a market value of 5.61 billion pounds ($785 million). The benchmark EGX 30 Index retreated 0.2 percent.
Sawiris replaced Ahmed Abou Doma, who was named C.E.O. on Sept. 30 and left for “personal reasons,” the company said in statement on its website today. Orascom Telecom Media was established in 2011 to split Sawiris’s Global Telecom Holding SAE, allowing the latter to merge with VimpelCom Ltd.
Shares of Orascom Telecom Media are down 14 percent since their trading debut in January 2012 as the company failed to deliver on expansion plans, compared with a 127 percent surge for the EGX 30. Dividend payments over the period, though, have given the company’s investors a total return of 365 percent, according to data compiled by Bloomberg.
“Some investors are interpreting this as Naguib Sawiris renewing his commitment to the company especially because there was speculation it maybe liquidated,” Sarah Shabayek, a telecommunications analyst at Cairo-based CI Capital with an underweight rating on the stock, said by telephone. “Orascom’s biggest need now is to raise money in order to invest in expansion as it’s been saying since its inception.”
Orascom Telecom Media operates mobile networks in North Korea and Lebanon in addition to a five-percent stake in Egyptian Co. for Mobile Services. The shares have two buy ratings, two sells and one hold, according to analyst recommendations compiled by Bloomberg.
To contact the reporter on this story: Ahmed A. Namatalla in Cairo at anamatalla@bloomberg.net
To contact the editors responsible for this story: Samuel Potter at spotter33@bloomberg.net Matthew Brown
