Though Etisalat remains in our view the head and shoulders frontier market telecom equity to hold from both a value (2011e EPS of 6.8x is a 30% discount to EEMEA peers at 9.6x/3-year average of 10.4x per Morgan Stanley) and growth standpoint (despite the latest Zain-pullout) given its relatively high EBITDA margin (despite intense pressue from du), wide geographical footprint (though its foothold in Saudi Arabia remains the foundation) and strong net cash position, Egypt’s hitherto distressed domestic sector presents its own opportunities. Ahead of tomorrow’s stock exchange reopening, and while reiterating his long-term confidence in Egypt to Bloomberg yesterday, Templeton Asset Management’s Mark Mobius underscored telecoms in particular as one of his favorite sectors. To that end, both Orascom Telecom (OT) and Telecom Egypt (TE), which trade at a relatively low 7.3 and 8.5x earnings respectively and are down 16.2 and 11.3 percent YTD, look attractive at current levels. In regards to the latter, wholesale services–including bandwidth capacity leasing to ISPs, and national and international interconnection services–continue to be the crucial growth driver as declining retail revenues are likely indicative of an increasingly competitive landscape (though while the firm’s fixed subscriber base declined to 9.3 million, from 9.6 million at the end of 2009, the market share for data subscription now sits at 63% versus 61% at the end of 2009). While overall revenues grew by 4% y/y in 2010 (4x estimates), for instance, full year wholesale revenues for TE grew by 18% YoY to EGP 4.9 billion, representing 48% of total group revenues. Finally, the company’s net cash position is strong, rising to EGP 4.1 billion (from EGP 1.4 billion at the end of FY2009) and leading the Board to recommend a cash dividend of EGP 1.3 per share–equating to a dividend yield of 8% and a payout ratio of 67% (versus 74% in FY2009). Meanwhile, the former continues to be considered a strong value play by many analysts given its leading position in core markets aside from Egypt such as Algeria, Pakistan and Sub-Saharan Africa. That said, J.P. Morgan noted last month the firm’s equity remains “very speculative” given the uncertainty underlying the current row in Algeria.
JGW
Archives
- November 2016
- July 2012
- June 2012
- May 2012
- April 2012
- March 2012
- February 2012
- January 2012
- December 2011
- November 2011
- October 2011
- September 2011
- August 2011
- July 2011
- June 2011
- May 2011
- April 2011
- March 2011
- February 2011
- January 2011
- December 2010
- November 2010
- October 2010
- September 2010
- August 2010
- July 2010
- June 2010
- May 2010
- April 2010
- March 2010
- February 2010
- January 2010
- December 2009
- November 2009
- October 2009
- September 2009
- August 2009
- July 2009
- June 2009
- May 2009
- April 2009
- March 2009
- February 2009
- January 2009
- December 2008
- November 2008
- October 2008
- June 2008
- May 2008
Blog Stats
- 212,932 hits
Join 63 other subscribers
Blogroll
- About Tigers and Frontiers
- African Capital Markets News
- Beyond Brics (FT)
- Bloomberg
- efrontierjournal.com
- Financial Times
- Flying Carpets and Broken Pipelines
- historysquared
- IKN
- Investment Postcards
- Jet Fin – Emerging Markets Hedge Funds
- Macro Man
- Mark Mobius
- Michael Pettis
- Patrick Chovanec
- Private Equity Africa
- Rogue Economist Rants
- The Big Picture
- The Economist
- The Macro Trader
- Timbuktu Chronicles
- Without Borders
- World Beta
- Zambian Economist
Frontier Market Oriented Funds and Firms
- AB Invest
- Abraaj Capital
- Absa Capital
- Acadian Asset Management
- Actis
- African Alliance
- Africinvest
- Afrinvest
- Ajeej Capital
- Al Mal Capital
- Al Masah Capital
- Alef Capital
- Algebra Capital
- Ansher Capital
- Arqaam Capital
- Ashmore Investment
- Audi Capital
- Auerbach Grayson
- Aureos Capital
- Avaron Capital
- B&M Consulting
- Beltone Financial
- BGL
- Bladex Asset Management
- Blakeney Management
- BlomInvest
- BMA Capital
- BMCE Capital
- Brait
- Cambodia Emerald
- Capital Alliance
- Capital Management Group
- Capital Management House
- Caravan Capital Management
- Caravel Management
- Cartica Capital
- CDC Group
- Celfin Capital
- Chapel Hill Denham Group
- Charlemagne Capital
- Citadel Capital
- CLSA
- CLSA Securities
- Colony Capital
- Consilium Investment Management
- Coronation Financial Holdings
- Daman Investments
- Darby
- Databank Group
- Devenco
- Dragon Capital
- Duet Group
- EFG-Hermes
- Emergent Asset Management
- Emerging Capital Partners
- Emerging Markets Group Holding
- Emerging Markets Management
- Emerisk
- Eurasia Capital Management
- Evolvence Capital
- Exotix
- Finch Asset Management
- Forum Asset Management
- Forward Management LLC (Accessor Funds)
- Foursan Group
- Frontaura Capital LLC
- Frontier Advisory
- Frontier Invest
- Frontier Investment and Development Partners
- Frontier Market Asset Management, LLC
- Global Investment House
- Gulf Capital
- Gulfmena Alternative Investments
- Harding Loevner
- Helios Investment
- Henshaw Capital Partners
- Hermitage Global
- HSBC Amanah
- Imara Holdings
- Insparo Asset Management
- InterCapital
- Investec
- Kaizen Venture Partners
- Kestrel Capital
- Laurium Capital
- Leopard Capital
- Loita Capital Partners
- LR Global
- Makaseb
- Markaz
- Mashreq Bank
- Mekong Capital
- Mena Capital
- Moneda Asset Management
- Naeem Holding
- NBK Capital
- Neuberger Berman
- Nile Capital Management
- Northern Gulf Partners
- Nova Capital Partners
- Nubuke Investments
- Omni Bridgeway
- Oryx Investment Management
- Pamodzi
- Phoenicia Group
- Pioneers Holding
- Prince Street Capital Management
- Progressive Developing Markets Limited (Advance Frontier Markets Fund)
- PXP Asset Management
- Renaissance Capital
- Sanlam
- Sarasin EmergingSar – New Frontiers
- Satya Capital
- Shuaa Capital
- SICO
- Silk Invest
- SinoGulf Investments
- Standard Bank
- Standard Chartered
- Sturgeon Capital
- Syailendra Capital
- Terra Nova Ventures
- Tetrad Group
- The Giraffe Group
- Threadneedle
- TLG Capital
- Tuareg Capital
- Vetiva
- Vietnam Holding
- VinaCapital Group
- Voltan Capital
- Wambia Capital
Links
- An error has occurred; the feed is probably down. Try again later.
Categories
- Abu Dhabi (15)
- Africa (18)
- Agriculture (2)
- Agriculture futures (1)
- Airlines (3)
- Albania (1)
- Algeria (2)
- Aluminum (1)
- Angola (6)
- Argentina (9)
- Asia (5)
- Azerbaijan (1)
- Bahrain (5)
- Bananas (1)
- Bangaldesh (1)
- Banking (2)
- Bankruptcy Law (1)
- Biofuels (1)
- Bolivia (1)
- Botswana (16)
- Breweries (4)
- Broadband (1)
- Building (1)
- Cambodia (11)
- Cameroon (1)
- Cement (3)
- Chile (12)
- China (9)
- Coal (6)
- Cocoa (13)
- Coffee (4)
- Colombia (7)
- Commodities (2)
- Construction (3)
- Consumer Goods and Retail (1)
- Container Shipping (1)
- Copper (5)
- Costa Rica (1)
- Credit-Default Swaps (CDS) (3)
- Croatia (1)
- Crude Oil (13)
- Currencies (8)
- Czech Republic (2)
- Dealmaking (1)
- Debt restructuring (2)
- Derivatives (2)
- Dubai (26)
- Eastern Europe (6)
- Ecuador (1)
- Egypt (29)
- Energy (4)
- ETFs (1)
- Ethiopia (2)
- Farmland (6)
- Fertilizer (7)
- Financial Services (26)
- Fixed Income (24)
- Food and Beverages (8)
- Foreign Exchange (1)
- Frontier Markets – Overview (64)
- Funds (19)
- General Market (1)
- Georgia (1)
- Ghana (19)
- Glass making (1)
- Gulf Cooperation Council (11)
- Gulf states (15)
- Housing markets (2)
- Hungary (2)
- Indonesia (18)
- Inflation (1)
- Insurance (4)
- Iodine (1)
- IPOs (2)
- Iraq (5)
- Islamic Finance (4)
- Ivory Coast (8)
- Jamaica (1)
- Jordan (5)
- Kazakhstan (7)
- Kenya (24)
- Kuwait (15)
- Laos (1)
- Latin America (2)
- Lebanon (6)
- Liberia (2)
- Libya (1)
- Lithium (1)
- Lithuania (1)
- M&A (1)
- Malaysia (8)
- Mauritius (4)
- Mexico (3)
- Middle East (12)
- Mining (6)
- Mongolia (3)
- Montenegro (3)
- Morocco (9)
- Mozambique (3)
- MSCI Frontier Markets Index (2)
- Namibia (1)
- Natural Gas (2)
- Nigeria (38)
- Oman (5)
- OPEC (4)
- Pakistan (9)
- Palestinian (1)
- Palm oil (4)
- Panama (1)
- Papua New Guinea (1)
- Peru (6)
- Petrochemicals (1)
- Pharmaceuticals (1)
- Philippines (1)
- Phosphate (1)
- Poland (7)
- Ports (1)
- Private Equity (6)
- Property (8)
- Qatar (17)
- Rare earth elements (1)
- Rating Agencies (1)
- Risk-Management (1)
- Rubber (1)
- Russia (1)
- Rwanda (1)
- Saudi Arabia (22)
- Securities Law & Regulation (1)
- Securitization (1)
- Serbia (1)
- Soft-Drinks (1)
- South Africa (10)
- South Korea (1)
- Southeast Asia (1)
- Sovereign Funds (1)
- Soybeans (2)
- Sri Lanka (7)
- Startup Companies (1)
- Sub-Saharan Africa (3)
- Sugar (1)
- Sukuk (9)
- Sustainable forestry (2)
- Swaps (1)
- Syria (1)
- Taiwan (1)
- Tanzania (2)
- Tea (1)
- Technology (1)
- Telecoms (23)
- Thailand (8)
- Tourism/Hospitality (1)
- Trader/Fund Profiles (1)
- Trinidad & Tobago (1)
- Tunisia (13)
- Turkey (7)
- UAE (18)
- Uganda (4)
- Ukraine (2)
- Uncategorized (34)
- Uranium (1)
- Uruguay (1)
- Uzbekistan (1)
- Vegetable oil (1)
- Venezuela (2)
- Vietnam (22)
- Water (2)
- World Economic Forum (1)
- World markets (2)
- Yuan (1)
- Zambia (12)
- Zimbabwe (3)
Error: Twitter did not respond. Please wait a few minutes and refresh this page.
3 comments
Comments feed for this article
March 23, 2011 at 1:27 am
MENA distress makes telecoms especially attractive « Frontier Markets « Investing In Africa – Mutual Fund
[…] MENA distress makes telecoms especially attractive « Frontier Markets. […]
March 23, 2011 at 12:12 pm
Hot Links: Get It How We Live It The Reformed Broker
[…] Middle East North Africa troubles have pushed telecoms down to attractive levels. (FrontierMarkets) […]
March 24, 2011 at 2:38 pm
The mid-east crisis has created huge value in this emerging market sector | TheTradersWire.com
[…] Read full article… […]