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March 28, 2010
COAST published its special report on Zain-Bharti deal(English)
Zain Africa sale to Bharti Airtel will have a big influence in the Kuwait market and will alternate the direction of the company.
Zain is expected to pay off most of its large debts, a big portion of this debt is from Kuwaiti banks. Banks will be more relaxed in its loan terms and will gradually increase the size of loans they use to give during 2009. Although banks will be more cautious, they definitely will give out more loans than last year.
With the low interest rate levels today, it’s expected that investors find it a good time to finance their projects through debt, this will stimulate the market again and the securities market will react positively.
As for Zain, it looks like it is preparing for a new strategy soon and the direction of the company will be more apparent this year. Their exit from Africa is surely rewarding, but it will be a onetime deal. Are there more exits to follow? Are there more acquisition? A lot of speculation will be floating around Zain’s future, but only the board of directors know exactly where they are going, and it will be announced to the public once it is finalized.
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