Orascom shares soar as suspension ends
Cairo, January 22, 2012
Shares in Egypt's Orascom Telecom (OT) surged 56 percent on Sunday following an eight-week suspension imposed as the company spun off assets owned by Egyptian businessman Naguib Sawiris.
The purchase by Russia's Vimpelcom of most of OT in April resulted in it being split into two.
Under the deal, assets including a stake in Egyptian mobile operator Mobinil and Orascom's North Korean operations were spun off into Orascom Telecom Media and Technology (OTMT) OTMT, which will remain under Sawiris's control.
One analyst said OT's shares were boosted by an agreement by Vimpelcom announced earlier this month to sell 50 percent of OT's Djezzy unit to the Algerian government.
"The Djezzy sale was the catalyst," said Ahmed Abu Taleb of Pharos Securities, adding that he believed the surge in OT's share price was an overreaction. "I expect OT and the market as a whole to cool off a bit by the end of the day."
OT's shares, which had been suspended since November 24, were trading at 2.70 Egyptian pounds ($0.45) while OTMT's shares were trading at 0.87 pounds.
Abu Taleb said OTMT's share price was weak because it had few assets left apart from Mobinil, whose stock has slid 13.9 percent since November 24.
Vimpelcom bought Orascom's parent company, Wind Telecom, in April in a deal worth more than $6 billion.
Egypt's benchmark index was trading 1.6 percent higher. – Reuters