CI Capital cuts Mobinil TP by to L.E 109/share

CI Capital said that Egyptian Company for Mobile Services (ECMS) "Mobinil" (EMOB) has come under pressure from an array of external factors which harshly affected its performance in 2011. These factors included: (1) national unrest, (2) boycott campaigns, (3) market saturation, (4) stiff competition, and (5) a higher corporate tax rate.

Nonetheless, we expect a normalized performance in 2012 and a revival of growth in 2013, to be buoyed by internet and data usage. We cut our LTFV by 13% to EGP106/share and our TP by 10% to EGP109/share, maintaining our Underweight rating.

A potential upside for the stock, however dim the probability, is a possible deal betweenFrance Telecom (FT) and Orascom Telecom before the latter's put option exercise dates or an exercise by ORTE between September and November 2012.