Breaking News

U.K. Bond Rating Affirmed at Aa1 by Moody’s After Scottish 'No' Vote
Tweet TWEET

OTMT Dividend Boosts Shares to Seven-Month High: Cairo Mover

Orascom Telecom Media & Technology Holding SAE (OTMT), controlled by Egyptian billionaire Naguib Sawiris, rose to the highest level in more than seven months after its board recommended a 41 percent dividend payout.

Shares of the Cairo-based company climbed 4.4 percent to 72 piasters at 11:57 a.m. local time, the highest intraday level since July 16. That brings its two-day gain since the dividend announcement to 14 percent. The benchmark EGX 30 Index (EGX30) lost 1.4 percent today.

The company also known as OTMT, which controls assets in Egypt, Lebanon and North Korea, recommended yesterday a 1.35 billion dividend distribution for 2012. That’s a 26-piaster per share bonus, according to data compiled by Bloomberg , representing 41 percent of the closing share price before the announcement. OTMT was established in 2011 to split the assets of Sawiris’ Orascom Telecom Holding SAE (ORTE) and facilitate its merger with Russia’s VimpelCom Ltd. (VIP)

“The move is positive as it signals OTMT’s readiness to give cash back to shareholders in the absence of a good M&A opportunity,” Karim Khadr and Sarah Shabayek, analysts at Cairo-based CI Capital, who have an overweight recommendation on the stock, wrote in a report today. “This should increase shareholder trust in management.”

The company, which owns 75 percent of North Korea’s monopoly mobile phone service, said last week the country’s regime issued new policies that allow uncensored mobile-phone internet access for foreigners. It paid a 1.05 dividend per share in July, according to data compiled by Bloomberg.

The stock is a recommended buy by five analysts on Bloomberg and a hold by two. “Downside risks” include a deterioration in the North Korean operating environment and the sustainability of the losses in the company’s media and technology business, CI Capital said.

To contact the reporter on this story: Ahmed A. Namatalla in Cairo at anamatalla@bloomberg.net

To contact the editor responsible for this story: Alaa Shahine at asalha@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.