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

Orascom Telecom Media & Technology Holding SAE, 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 2.9 percent to 71 piasters at the close in the capital, the highest level since July 16. That brings its two-day gain since a dividend announcement to 13 percent. The benchmark EGX 30 Index lost 2.3 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 and facilitate its merger with Russia’s VimpelCom Ltd.

“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.

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