STC shares hit eight-month high on unit sale deal

Former monopoly agreed a deal to sell its Indonesian unit to a Malaysia's Axiata Group

Shares in Saudi Telecom Co (STC) surge to an eight-month high after the former monopoly agreed a deal to sell its Indonesian unit to a Malaysia's Axiata Group Bhd.

STC rose as much as 6.2 percent to its highest level since January, before giving back some of these gains to be up 2.8 percent at 0829 GMT.

The deal is for an undisclosed amount but may help STC end a tussle with global banks over a $1.2 billion loan tied to the Indonesian firm. It also allows the firm to exit a loss-making investment.

"STC has been reevaluating its international footprint for a while now, and this is a step in the right direction," said a Dubai-based research analyst.

"However, the majority of foreign exchange risk and volatility, which often results in currency losses, is generated from their stake in Turk Telekom, so the sale of Axis won't affect these significantly."

STC owns an indirect stake in Turk Telekom through its holding in Dubai-based Oger Telecom.

Axiata shares are up 0.4 percent on Kuala Lumpur's bourse.

Saudi Arabia's benchmark gains 0.2 percent to 8,020 points.

Related:
Join the Discussion

Disclaimer:The view expressed here by our readers are not necessarily shared by Arabian Business, its employees, sponsors or its advertisers.

Please post responsibly. Commenter Rules

  • No comments yet, be the first!

All comments are subject to approval before appearing

Further reading

Features & Analysis
Inside Google's brave new world

Inside Google's brave new world

The $500bn technology giant is extending its reach into hardware...

Under attack: how to beat the hackers

Under attack: how to beat the hackers

The smarter technology gets the more opportunities there are...

After all the hype, what's the future for Hyperloop One

After all the hype, what's the future for Hyperloop One

Los Angeles-based Hyperloop One may have struck a deal this month...

1
Most Discussed
sponsoredTracking