3 March, 2007
Kyrgyz telecom shares included to ABIndex calculation
Today the Experts council included to list of united stock ABIndex shares of national telecoms operator – “Kyrgyz telecom” OJSC. In the judgment of the experts this company is the most interesting securities on local stock exchange.
The shares distributed between about 10 thousand shareholders. Among of them the largest is State Committee of Kyrgyz Republic on state property – 77.9 % and Social fund of Kyrgyz Republic – 12.5 %. Shares of “Kyrgyz telecom” OJSC reputed as a “blue chips” on securities market, shares included to a highest “A” category of Kyrgyz Stock Exchange. And its liquidity is maintained by official market-maker on Kyrgyz Stock Exchange. Official market-maker of “Kyrgyz telecom” OJSC is “BNC Finance” Investment Company.
For today the market price for Kyrgyz telecom shares fluctuating on the level of 11-13 som ($ 0.29-0.34) per one share. One and a half years ago the price for one share was about 5-6 som ($ 0.13-0.15) per one share. Accordingly the growth constitutes more than 100 %. Some of participants remember the time, when Telecom shares cost three US dollars per one share.
“Kyrgyz telecom” OJSC developing enough actively, how it’s possible for the company with state share holding: the growth of capital during 2003-2005 consists about 64 % and reached 1 billion som ($ 26.5 million) at the beginning of 2006 in case of annual gross profit about 2 billion som.
Kyrgyz telecom pays dividends to shareholders properly. For the last two years the dividend per one share was about 0.7 som ($ 0.018). If we calculate the yield to current market price – 13 som, the yield will consist only 5.4 %. In spite of everything Kyrgyz telecom shares are in good request
The rationale of shares acquisition for portfolio investors is oncoming privatization and relational with that shares growth expectation. According to the report of plenipotentiary state authority shares in state holding will be displayed for sale on privatization tender, while earlier Government and Parliament proposed to move for sale from 31 to 51 %. Some experts supposed that after three unfortunate attempts, fourth should be the last. It is well known that for increasing the investment attraction state authority gave a GSM license to Kyrgyz telecom, which however can be used only after privatization.
On the last tender the price for 51 % of Kyrgyz telecom shares was about $ 15-16 million, so the company’s capitalization according to this price consists about $ 30 million. So the market is waiting for that company will be sold more expensive.
Some analytics consider, that Kyrgyz telecom has a huge latent potential, which can’t be realized because of few objective reasons – presence of ineffective owner in the person of state. New private owner after investing additional resources, can greatly increase profits, and if Kyrgyz telecom will use its GSM license, so company can reach to new very profitable and fast-growing market of cellular communications. Some analytics, referring to approximate capitalization of “Sky Mobile” (Bitel and Mobicard brands) equal in value of $ 300 million, mention the potential value of Kyrgyz telecom not less then $ 100 million. Other analytics gave more wary valuation in $ 50-70 million.
There is interesting situation with acquisition of control share holding (50 % plus one share), according to the local legislation, investor in that case have to propose to all shareholders to buy back their shares. So, it’s very possible that every one who wishes can sell its own shares during the privatization of Kyrgyz telecom.
In the latter weeks the Kyrgyz telecom shares price in increasing frequency jump up to 13.5 ($ 0.35) and even to 14.3 som ($ 0.38) per one share.
According to the words of BNC Finance Managing director Arslanbek Kenenbaev, it’s easy to see increasing interest to national telecoms operator from the direction of foreign portfolio investors, and for the present he gave recommendation to all investors “to buy”.
ABIndex dinamycs
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