Celtel Zambia and MTN rated “overweight” by Morgan Stanley

Celtel Zambia, which listed on the Lusaka Stock Exchange June 11, and pan-African conglomerate MTN Group, have been rated as “overweight” investments by analysts at Morgan Stanley.

The stocks represent the top picks of African telecoms stocks.

Celtel Zambia’s stock listing was oversubscribed by 200 per cent and raised US$205 million.

The term “overweight” in investment terms generally signifies that the security is expected to outperform either its industry, sector or, even, the market altogether.

Celtel Zambia’s listing was oversubscribed by 200 per cent, becoming the country’s largest initial public offering and raising ZMK665.6 billion (US$205 million).

Morgan Stanley noted that the Zain subsidiary is “attractively valued” with a dominant 84 per cent market share in Zambia.

MTN, Africa’s largest wireless carrier by subscriber numbers, was upgraded from “equal-weight” to “overweight”, while Safaricom which was listed in Kenya in March, has an initial rating of “equal-weight”.

Egyptian holdings Orascom Telecom was downgraded from “over-weight” to “equal-weight”.

Morgan Stanley estimates mobile phone use in sub-Saharan Africa will rise from 19 per cent currently to 42 per cent of the population by 2012.

Morgan Stanley also notes that new services such as mobile banking will also make owning a mobile phone “even more essential”.