HSBC cuts price target on Zain
Manama, August 30, 2011
HSBC cut its price target for Zain's shares by 10 per cent after the Kuwaiti mobile operator reported a lower-than-expected quarterly profit.
Zain posted a 4.2 per cent dip in second-quarter net profit of KD70.3 million ($257.3 million), according to Reuters calculations, missing analyst estimates.
The brokerage, which cut its price cut on the shares to 0.90 dinar from 1 dinar, maintained its 'underweight' rating on them and said it sees license fees in South Sudan and Iraq hurting the company's results.
Earlier this month, Iraq's parliament had ruled that Zain along with two other mobile operators must pay $2.85 billion in licence fees and fines within a month, overturning a deal allowing them to pay over five years.
The telecom operator is in talks with South Sudan authorities regarding fees to extend its license to operate in the country.-Reuters