KAZAKHTELECOM: Life After Dividends: Looking for New Catalysts

We reiterate our BUY rating on Kazakhtelecom. We believe that the stock’s potential was overshadowed in 2008-11 by the murky prospects for the K-Cell stake’s monetisation and later by corporate governance concerns over the distribution of dividends. The K-Cell stake has now been sold, the record date for the extraordinary KZT19,888/share dividend has passed and the stock’s performance should be mainly driven by Kazakhtelecom’s fundamentals, which look strong to us. With its extensive network and near-monopoly status, Kazakhtelecom is positioned to benefit from the broadband boom in Kazakhstan.

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