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STC Drops Most in Two Months as CEO Resigns: Riyadh Mover

March 17 (Bloomberg) -- Saudi Telecom Co., the second-biggest phone company in the Persian Gulf, fell the most since January as Chief Executive Officer Khaled Al Ghuniem quit after less than a year in his post.

The stock decreased 2 percent, the most since Jan. 21, to 40 riyals at the close in Riyadh, reducing the company’s market capitalization to 80 billion riyals ($21.3 billion). About two million shares were traded, more than double the three-month daily average. Saudi Telecom was the biggest decliner on the benchmark Tadawul All Share Index, which increased 0.4 percent.

“This gives a gloomy picture of the company’s outlook,” said Mohammed Al-Omran, a financial analyst and president of the Gulf Center for Financial Consultancy in Riyadh. “Uncertainty will prevail on the company’s operations in the future.”

The departure follows a number of resignations and departures at the company, which posted a 6 percent decline in 2012 profit. Jameel Al Molhem, head of local operations, resigned last month while Ghassan Hasbani, chief of international operations, left in the past year. Al Ghuniem, who was appointed CEO in June, cited “special circumstances” for his resignation.

Eleven analysts have a buy rating on the stock, while three recommend investors hold the shares, according to data compiled by Bloomberg. Saudi Telecom has retreated 7.6 percent in 2013, compared with a gain of 12 percent for Emirates Telecommunications Corp., the region’s largest phone company by market value.

To contact the reporters on this story: Deema Almashabi in Riyadh at dalmashabi@bloomberg.net; Zahra Hankir in Dubai at zhankir@bloomberg.net

To contact the editor responsible for this story: Shaji Mathew at shajimathew@bloomberg.net

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