 |
Al-Ahram Weekly On-line 23 - 29 November 2000 Issue No.509 
| ||
Published in Cairo by AL-AHRAM established in 1875 |
| ||
|
Al-Ahram Weekly On-line 23 - 29 November 2000 Issue No.509
| ||
| Published in Cairo by AL-AHRAM established in 1875 |
| ||
Egypt Region International Economy Opinion Culture Focus Travel Living Sports Profile People Time Out Chronicles Cartoons Letters Market focus:
Steady waters
By Sherine Abdel-RazekFears that the market's slow but steady recovery could be short-lived were held off for another week when the market recorded its highest levels since August in the week ending 16 November. Almost all indices registered gains and more investors are apparently taking heart in the ongoing market revival. Local investors dipped their toes in waters where only international heavyweights have been swimming and a buoyant telecommunications sector continued to put muscle behind the trades.
The Capital Market Authority (CMA) index gained 4.9 points to reach 641 points, with the overall market turnover standing at LE651 million for the week. But numbers can be deceptive -- these figures largely represent the activity of only a handful of companies. The market's most active shares dominated more than 70 per cent of all transactions. Selling orders from foreign investors accounted for a significant chunk of the market's transactions (20 per cent), but this did not undermine the performance of second-tier companies. A total of 78 companies ended the trading week higher than their opening levels; 41 companies lost ground.
Orascom Telecom (OT) and MobiNil, the two market movers, were still capitalising on news of increasing foreign interest in their equity, although there is still no confirmation of a deal. OT also announced that it has signed a syndication loan of $200 million to fund its expansion plans as a regional GSM operator. The loan will be provided by 12 international banks, led by banking stalwarts Chase Manhattan and Citibank. The news translated into increased demand for OT shares, which closed at LE67.9 -- a 20 per cent increase over last week. OT holds 19 GSM licences in the region and is developing its Internet-related activities through Internet service provider (IPS) subsidiary LinkdotNet, which has a 40 per cent market share.
Source: Al Imam Securities Brokerages
MobiNil again led the pack with a total LE243 million worth of its shares changing hands during the week. It closed at LE95.l -- a gain of nine per cent. Construction conglomerate Orascom Construction Industries (OCI) was another favourite. Company postings that netted profits for the nine months ending in September had increased by 59 per cent put a glimmer in investors eyes. Profits reached LE204.9 million and OCI shares jumped by 22 percent to close at LE46. Also among the trading front-runners this week was Commercial International Bank (CIB), which saw LE55.7 million of its shares traded. The bank has announced that it has obtained a $150 million syndicated loan from over 20 international financial institutions. The loan, with a three- to five-year maturity, will be used to expand CIB's foreign currency credit facilities. CIB shares closed at LE37.
The Holding Company for Financial Investments (Lakah Group) is still gunning for glory after its controversial chairman, Rami Lakah, snagged a parliamentary seat in recent elections. The group maintained its revival, topping the list of the most actively traded shares in terms of transaction volume and coming in second among gaining stocks. Shares closed at LE37, a 25.8 per cent increase. The group also announced early in the week that a new round of negotiations will begin on the question of the Lakah Group's bank debt settlement.
All the positive buzz even seeped into the performance of mutual funds, which recorded strong yields during the week, but bond activity was hurt by a recent interest rate rise on National Bank of Egypt (NBE) investment certificates, as well as interest rate fluctuations on bank deposits. The overall value of bond transactions came down to LE4 million during the week, compared to LE11.5 million the week before.
Analysts predict that this healthy market performance will last for sometime, but traders are more reserved, saying that the market will undergo a moderate "correction" if the rumours that caused its revival -- such as foreign investor interest in OT and hopes that the new parliament will pass a long-awaited mortgage law -- do not materialise.
Related stories:
The courage of the climb- 16 - 22 November 2000Related web-sites:
Cairo and Alexandria Stock Exchanges
© Copyright Al-Ahram Weekly. All rights reserved
