RIYADH: Saudi Telecom Co.’s shares soared 6.6 percent on Sunday after the board proposed to increase the company’s capital by 150 percent through the issuance of bonus shares.

Also known as stc, the telecom giant’s capital plan entails increasing capital from SR20 billion ($5.33 billion) to SR50 billion, according to a bourse filing.

In response to the announcement, the stock price rose to close at SR107 per share, amid trading of almost 19 million shares.

We need to understand that stc is not like any other telecom company

Mohammed Al-Suwayed, CEO of Razeen Capital

Shareholders are set to receive 1.5 shares for every share owned by capitalizing an amount of SR30 billion from retained earnings.

 “The increase in stc’s capital will support achieving its growth and expansion strategy along with maximizing its shareholders’ return,” the company said.

The proposal is subject to shareholders’ approval in the next extraordinary general assembly meeting.

“We need to understand that stc is not like any other telecom company.

“it’s becoming a huge conglomerate that owns an unrelated diversified portfolio of businesses as a reflection of its strategic role in vision 2030’s digital initiatives, so increasing capital was expected all along,” Mohammed Al-Suwayed, CEO of Razeen Capital, told Arab News.

Nonetheless, in the short term, he said this move might put some pressure on the stock price if profits showed weak performance by the end of the year.