We have been screaming sell on Zain since it broke the KD 1.200 level. Moreover, every analyst I speak to agrees with me that Zain is overvalued; the latest report I read by CREDIT SUISSE (17 Aug) valued the stock at KD 0.800. However, something seems to be wrong and the stock keeps soaring! What is driving the stock up? Is it the rumors about the sale of their African Operations or is it the sale of part of the company? Even with Vivend’s deal the stock isn’t worth KD 1.500 (click here for details). I lost track of all the rumored deal, but it seems the latest one is Indian Reliance which is offering to buy a the African operations of the company.
Whatever it is driving the stock up is just making it more expensive! Zain is considered the most expensive Telecom stock, valued at EV/EBITDA of 7.32x against the GCC aggregate of 5.83x and MENA aggregate of 5.59x.
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