Egypt’s Top Stock in 2016 Jumps as Buyout Speculation Returns

Global Telecom, Egypt’s best-performing share this year, rose the most in more than six months as investors bet its parent company will buy out the shares it doesn’t own at a premium.

The stock climbed 7.3 percent, the most since December 2, to 3.25 Egyptian pounds. About 100 million pounds ($11 million) of shares traded, almost five times the company’s average over the past year. The shares are up 56 percent this year, compared with a 3.5 percent advance for the benchmark EGX 30 Index.

Investors are increasingly speculating that VimpelCom Ltd., the majority owner of Global, will make an offer for the shares since the latter has sold-off all its investments in Egypt, according to Khaled Darwish, an executive director at Cairo-based CI Capital Asset Management, which oversees about 10 billion pounds of assets. Recurring speculation of an impending buyout has made Global one of the most volatile members of the EGX 30, with price swings over the past 100 days about twice as strong as those for the main index.

“It doesn’t make sense for the shares to continue to be listed in Egypt because the company is now down to just its corporate offices here,” said Darwish. “The speculation continues because sooner or later it has to happen. It’s only a question of when.”

Having discarded its Egyptian operations as part of the 2011 merger with VimpelCom, Global now operates mobile phone networks in Algeria, Pakistan, Bangladesh and Zimbabwe.

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