Telecom Egypt Co. (ETEL.CA), the Arab country’s monopoly fixed-line phone company, fell the most in almost two weeks after its chief executive officer became the second official to leave the post in six months.
Shares of the Cairo-based company dropped 1.5%, the most since June 21, to 13.45 Egyptian pounds at the close in Cairo. That valued the company at 23 billion pounds ($3.8 billion). The benchmark EGX 30 Index (EGX30) rose 0.8% Tuesday.
CEO and Managing Director Tarek Aboualam will step down as of Aug. 11, the company said in a Regulatory News Service release today, citing “personal reasons” for the decision. Aboualam was appointed in January to replace the retiring Mohamed Abdel Rehim, who assumed the position in April 2011.
“Although such a move raises concerns regarding the stability of the company’s leadership, we do not view a significant threat to the company’s medium-term strategy, which has not been affected by the previous management changes,” Sally Gerges, a telecommunications analyst at Beltone Financial Holding (BTFH.CA), said by e-mail today. She has a buy recommendation on the stock with a share price estimate of 18.91 pounds.
The company has maintained “operational performance” because of stability in “core positions such as chief financial officer, chief strategy officer and the heads of retail and wholesale units,” Gerges added.
Telecom Egypt’s first-quarter profit advanced 1.7% from a year earlier on growth of its wholesale business, which generated 57% of revenue. The company didn’t say when it would name a new CEO.