DUBAI: Egypt’s Orascom Telecom (OT) helped lift Cairo’s bourse yesterday after the company’s management urged shareholders to reject a buyout offer, raising investor hopes the bidder might propose improved terms.
OT’s board said the offer of $0.70 a share from a subsidiary of Russian billionaire Mikhail Fridman’s Altimo was below the stock’s fair value of $0.86, a figure drawn up by an independent financial adviser.
Shares in OT gained 0.4 percent to 4.68 Egyptian pounds ($0.67). The firm also reported its first-quarter earnings yesterday — it swung to a net loss, blaming foreign exchange losses and impairment of some assets.
“A third party is telling you the share is undervalued — the stock took an immediate reaction to that and absorbed the bad results,” said Mohammed Radwan, director of international sales at Pharos Securities. “The view now is that maybe Altimo will come back with a better offer.”
Cairo’s index advanced 1 percent, up for a fifth session in the last seven. Foreign investors were net buyers.
In Kuwait, the benchmark price index shed 0.6 percent to ease from a 43-month high as investors sold small-cap stocks, but it was largely unaffected by renewed political tensions in the Gulf state.
Some members of Kuwait’s cabinet have offered to resign, state news agency KUNA reported, citing the speaker of parliament. The resignations will have to be approved by the ruling emir and new members elected.
The weighted index, a better reflection of bluechips’ performance, rose 0.2 percent, up 11.3 percent year-to-date.
“We have more money being put into value stocks,” said Fouad Darwish, head of brokerage at Global Investment House.
“Political impact is limited and most likely we (will) see a reshuffle in the cabinet.”
Elsewhere, Saudi Arabia’s index added 0.1 percent to halt a three-session losing streak as bargain hunters returned.
The insurance sector benchmark extended declines, falling 1.7 percent.
Insurance stocks are a favourite of day traders and are among the most volatile on the bourse. Investors have cut positions after the market regulator on Sunday announced plans to introduce rules that would ultimately curb speculation.
Elsewhere, markets in the UAE extended gains, with Dubai’s benchmark rising 1.4 percent to a fresh 42-month high. Telecom operator du was the main support, jumping 9.7 percent in a late surge.
Abu Dhabi’s index rose 0.9 percent to its highest close since October 2008.
Abu Dhabi Commercial Bank rallied 6.3 percent after a cross-trade of more than 10 million shares, which may be a buyback by the bank. Reuters
