15 - 21 February 2001
Issue No.521
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Al-Ahram Weekly On-line 15 - 21 February 2001 Issue No.521 |
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Digestive lull
After a two-week revival, the market took a slight turn for the worse last week. The large caps ended the week in the red, due to limited transactions many of which were profit-taking. And so, the week ending 8 February was calm, with no surprises.
EFG-Hermes attributed the lull to the fact that "Investors appear to be digesting the earnings reports [issued recently] while watching stocks for signs of direction before taking any major investment decisions." Ariel Sharon's election as Israeli prime minister probably also contributed to the lacklustre performance. Registering these factors, the all-share Capital Market Authority index shed 3.56 points to end the week at 631.56 points.
Foreigners were net buyers, with transactions of LE92.5 million compared to LE80 million worth of selling orders. There was a 33 per cent decline, though, in the value of foreign buying orders compared to the week before.
Topping the list of most actively traded shares was the Lakah Group. The reason for this most recent spate of interest had nothing to do with its chairman Rami Lakah's election to parliament or the controversies surrounding it. Instead, the share capitalised on rumours that the Japan-based electronics behemoth Toshiba was negotiating to buy 4 per cent of the group's shares. Details of the purchase deal are to be announced by the end of this month. Despite all of this buzz, shares closed the week 5 per cent lower at LE2.26.
Another prominent market player, Suez Cement, managed to maintain its value, closing at the same price it opened with -- LE37 -- in spite of talk that an impending deal with a foreign strategic investor went sour. Traders, however, attributed Suez's decline to its plans for a 17 per cent capital increase, which is subject to the approval of its general assembly later this month. The company had announced that it planned a capital increase of 10.1 million shares to be sold to a strategic investor, which traders maintain is too small to attract the interest of such an investor.
On a more upbeat note however, news of a share swap deal by which Orascom Hotel Holdings (OHH) will acquire 100 per cent of Orascom Projects and Touristic Development (OPTD) attracted considerable investor interest for the second week running. Both companies saw their shares climb in value with OHH leaping by 4 per cent to close at LE7.96, and OPTD gaining LE2.18 to end at LE10.48. This was not the only news for OPTD, which revealed a plan to sell its division for the production of beer and wine, El-Gouna Beverages. An OPTD spokesman said that this move comes in line with OPTD's plan to refocus on its core businesses in the tourism sector.
An OPTD spokesman said that several bidders were interested in acquiring either part or all of El-Gouna Beverages, in which OPTD owns a 35 percent stake. The Sawiris family and Lebanon's Debbane family are among the other shareholders.
Rumours about an El-Gouna sale have been circulating for some time, with Al-Ahram Beverages, El-Gouna's sole local competitor, topping the list of potential buyers.
When contacted by Al-Ahram Weekly, a source from Al-Ahram Beverages refused to comment on the matter. The share price of Al-Ahram Beverages ended the week LE0.37 lower at LE52.63.
Rumours that foreign strategic investors had their eyes on El-Ezz Porcelain and the Olympic Group failed, however, to invigorate their shares.
The star of the banking sector, Commercial International Bank (CIB), was one of the few lucky stocks of the week, witnessing a rise in both local and foreign demand. CIB, which is Egypt's biggest private bank in terms of assets, received a boost from brokers' positive predictions regarding its results which are due to be announced within two weeks' time.
Two other market leaders, MobiNil and Orascom Telecom, kept a much lower profile than they had in recent weeks. Despite the fact that transactions in its shares accounted for 12 per cent of overall market turnover, MobiNil ended the week in the losers' camp, closing at LE74.14, compared to LE79.29 the previous week. Orascom Telecom's luck was no better having shed LE2.45 per share, to close at LE43.42.
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