Orascom Telecom leads Egypt up on North Korea venture
CAIRO Dec 10 (Reuters) - Shares of Orascom Telecom ORTE.CAORTEq.L posted their sharpest single-day gain in at least a year on Wednesday, lifting Egypt's main index, as the firm said it would start operations in North Korea next week.
Shares of Orascom, the largest Arab mobile operator by subscribers, surged 11.11 percent to 26.70 Egyptian pounds ($4.84). The company said it would start operations in the reclusive communist state on Dec. 15.
"North Korea is a new market and penetration is very low," said Teymour el-Derini, trader at Beltone Financial in Cairo.
Orascom shares, the fifth worst performers this year on the CASE30 index, had fallen 74 percent this year to last week's close.
Investors were buying other telecom shares because of their high dividends, Mohamed Radwan, trader at Pharos Securities said.
Shares of Mobinil (EMOB.CA) rose 3.45 percent to 136.01 pounds and Telecom Egypt (ETEL.CA)(ETELq.L) gained 4.13 percent to 15.65 pounds.
Shares of Mobinil have the highest dividend yield on the CASE30 index and Telecom Egypt the fourth-highest, according to Reuters data.
"The telecom sector has proven lately that it is more defensive," Radwan said. "Their high dividend yield attracts investors and the prices have been more resilient to the volatility in the market."
The CASE30 index .CASE30, down 60 percent this year, rose 3.53 percent to 4,202.25 points. The Hermes index .HRMS gained 3.14 percent 397.80 points and the broader CIBC index .CIBC climbed 1.98 percent to 278.4 points. ($1 = 5.52) (Writing by Will Rasmussen)