Money on the markets

Bharti Airtel rises after Zain deal

Shares in Bharti Airtel rose over 6 percent in trade after the telecoms major closed its $9 billion acquisition of Zain’s Africa operations.

Bharti Airtel, which is now the world’s fifth-biggest mobile carrier by subscriber base following the deal, ended 5.5 percent higher in a broader market that saw a marginal rise of 0.2 percent.

Ratings agency Standard & Poor’s on Wednesday lowered its long-term corporate credit rating on Bharti Airtel to ‘BB+’ from ‘BBB-’ and kept the outlook as stable.

For the year, the stock has given a negative return of over 17 percent. Do you think the Zain deal will rev-up the company’s revenues and boost investor confidence?

Bharti Airtel shines in weak market

Shares in Bharti Airtel, India’s top mobile operator, gained 2.6 percent on Wednesday and ended the top gainer among Sensex components, even as the benchmark closed weak near its 2-month low.

Its shares had declined 2.9 percent over the two earlier sessions.

Rival firm Reliance Communications’ shares however ended weak after losing 1.05 percent. Idea Cellular closed marginally in red.

Shares in Bharti have dropped over 3 percent since mid-April. Do you think it is the right time to invest in the counter?

Bharti Airtel rises

Shares of Bharti Airtel closed 0.3 percent up on Wednesday in a broader market that ended 0.4 percent higher.

The telecom major hit an intra-day high of over 2 percent before closing. Bharti Airtel needs to work on getting regulatory clearances for its $9 billion deal to buy 15 African operations of Kuwaiti telecom Zain, and turning around the loss-making assets would be its priority.

The stock has moved over 7 percent so far this month, while for the year it has given a negative return of over 5 percent.

Do you think the Bharti-Zain deal will add value to the company and boost its shares?

Bharti gains on deal talks

Bharti Airtel rose on Monday morning on hopes that the firm is heading towards a smooth landing in its $9 billion deal talks to buy Kuwaiti telecom Zain’s African operations.

Bharti Airtel rose over 2 percent in intra-day trade and finally closed 1.4 percent higher at 316 rupees with volumes of 1.07 million shares.

The share was the second-worst performer in the 30-stock BSE index in 2009 and was among the only two stocks to have given negative returns even as the benchmark jumped 81 percent.

The counter has given a negative return of over 3 percent so far in this year. Do you see a buying opportunity here?

Bad year for telecom counters

Telecom stocks had a bad year with top counters such as Bharti Airtel and Reliance Communication slipping 8 and 23 percent respectively in 2009.

The overall market however gained as much as 80 percent during the year.

The Sensex ended 81 percent higher at 17465 and gained more than 7,000 points, its biggest yearly gain since 1991.

A price war among telecom operators discouraged investors as there were concerns about future profitability of such companies.

MTNL was another telecom stock that ended the year in the negative, slipping nearly 7 percent. Stocks such as Idea Cellular gained 6.7 percent and Tata Tele rose 23 percent.

Do you think telecom shares make an attractive buy in 2010?

Telecom shares dives in flat market

Shares of major telecom players plunged on Thursday, pulling the BSE Technology Index down 2.8 percent.

Bharti Airtel, which has a 3.6 percent weightage on the Sensex, dropped over 6 percent in a market that ended marginally up at 16,843. Trade in the counter stood at 8.1 million shares.

The other stocks that took a hit included Reliance Communications (down 6 percent), Idea (down 2.2 percent) and MTNL which dropped 1.08 percent.

Fear of survival and reduced profits loom for GSM operators as new entrants could spark a price war which in turn could squeeze the margins of top players.

The telecom regulator (TRAI) on Tuesday asked operators to bill customers on a per-second basis instead of the per-minute billing. TRAI’s move has already resulted in companies altering their plans which could impact their revenue growth.

Rating agency Fitch has highlighted in a statement that EBITDA margins of existing operators is likely to fall on lower ARPUs in the near term.

In an interview with Reuters, DoCoMo’s senior executive vice president, Kiyoyuki Tsujimura, said his company wants to bolster its services with Tata Teleservices.

Bad day at the bourses for Bharti Airtel

Shares of Bharti Airtel, India’s top mobile operator, slipped 8 percent on Monday and ended as the top Sensex loser.

Bharti shares closed down rupees 34.85 at 400.25 with volumes of over 6 million on the BSE, making it one of the most traded counters.

The drop comes after an over 4 percent gain on Friday post failure of tie-up talks with South Africa-based MTN.

Investors in this counter have little to cheer as Bharti shares have returned (-)2.5 percent since August.

At this stage, would you take advantage of this fall and buy shares of Bharti Airtel?

Bharti gains after deal collapse

Shares in Bharti Airtel ended 4 percent higher in a broader market which ended flat.

Bharti Airtel, which carries over 4 percent weightage in the 30-share sensitive index, closed at 435 rupees with volumes of 6.8 million.

Talks of a $24 billion tie-up between S. Africa’s MTN and Bharti Airtel were called off for the second time last night on political and regulatory concerns.

Investor in Bharti Airtel, which owns nearly a quarter of India’s total mobile subscriber base, were concerned about Bharti sweetening the deal, but are now open to the idea of the company looking elsewhere.

S&P has issued a statement that yesterday’s development will not affect Bharti’s rating, which stands at BBB-/stable/- -

Do you think the breakdown in talks with MTN is blessing in disguise for Bharti?

Will you buy Bharti Airtel shares?

Shares in Bharti Airtel gained 2.8 percent on Friday, contributing well to the benchmark’s gain of over 200 points on the last trading day of the week.

The company is in exclusive talks for a stake in South Africa’s MTN, a deal which will create the world’s No. 3 mobile firm. On Thursday, the two firms said they were extending talks till Sept. 30, their second such extension this year.

Bharti’s chairman said on Friday that they were not looking to sweeten its offer to buy a stake in South Africa’s MTN.

The deal is complex and is the main reason for the further extension, Morgan Stanley analysts wrote in a report.

Bharti Airtel is India’s top mobile operator and is valued at around $31 billion.

Bharti shares have gained over 10 percent after dipping to rupees 374 on August 10, which was its lowest since mid-May.

Do you think it is the right time to invest in shares of Bharti Airtel?

Bharti Shares drops on deal concern

Shares in Bharti Airtel fell more than 3 percent on Tuesday after the mobile operator and South Africa’s MTN group extended talks (to August 31) aimed at creating the world’s No 3 operator, beating China Mobile and Vodafone.

Bharti Airtel closed at 400.55 rupees and was among the top 20 traded stocks on the BSE, with volumes up to 835.10 million rupees.

The deal is valued at around $23 billion with a complex structure involving share swap and cash. MTN and its shareholders would take 36 percent economic interest in Bharti and the Indian firm would end up with 49 percent of MTN.

In the present structure, according to sources, Bharti will pay about $4-5 billion, which would probably be funded via debt and the rest through issue of new shares. 

This would more likely result in equity dilution as more shares are issued to fund the deal and debt would make the company more levered. This might not impress Bharti shareholders.

Bharti shares had dropped nearly 10 percent on May 25 when an announcement was made about the talks. Since then stock prices have seen a low of 384 rupees, signifying a standard deviation of 11.09.

While the Beta of Bharti Airtel with the BSE Sensex is relatively stable around 0.014 for the period May 25 to August 4, that for a one year period (July 2008 – June 2009) stands at 0.86.