STOCKS NEWS EUROPE-Telekom Austria drops on Bulgaria, capex warn

Shares in Telekom Austria (TELA.VI) drop as much as 3.8 percent to 11.06 euros, making them the biggest loser in the slightly weaker DJ Stoxx Telecoms index .SXKP, after Sal. Oppenheim cuts its investment opinion to "Neutral" from "Buy".

Sal. Oppenheim says in a note to clients it is worried Telekom Austria's Bulgarian unit may suffer if Bulgaria devalues its currency, and that it also fears the phone operator may invest too much in its Austrian high-speed network.

"We reduce our rating to neutral on the back of increasing risks and despite a clear valuation discout to the peer group on EV/EBITDA basis," Sal. Oppenheim analyst Frank Rothauge writes in the note.

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