Business | Markets
Zain stock jumps 5.5% but expansion could hit earnings
Shares of Kuwait's Mobile Telecommunications (Zain) jumped on Sunday on an upbeat earnings outlook, but analysts warned huge investments in expansion and stiff competition could weigh on profit this year.
- Reuters
- Published: 00:08 July 14, 2008
Kuwait City: Shares of Kuwait's Mobile Telecommunications (Zain) jumped on Sunday on an upbeat earnings outlook, but analysts warned huge investments in expansion and stiff competition could weigh on profit this year.
The third-largest Arab telecom company by market value, which is embarking on a $4.5 billion capital increase, is spending billions of dollars to expand into new markets, including 14 in Africa and a new venture in Saudi Arabia.
Zain's stock, the largest in Kuwait, jumped as much as 5.5 per cent on Sunday on volumes double their 90-day average after Zain CEO Sa'ad Al Barrak forecast 20 per cent growth in first-half earnings.
While the forecast in Al Watan daily boosted the shares, Zain's stock has lost more than a fifth of its value this year, including a 6.1 per cent decline since the start of June.
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