22 - 28 February 2001
Issue No.522
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Al-Ahram Weekly On-line 22 - 28 February 2001 Issue No.522 |
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| Published in Cairo by AL-AHRAM established in 1875 | Current issue | Previous issue | Site map | ||
A turn for the worse
By Sherine Abdel-Razek
The market maintained its downward trend during the week ending 15 February amid increasing regional volatility and a ratbag of rumours that, in the absence of real economic news, continued to shake investors' confidence.
The all-share Capital Market Authority Index nose-dived 7.76 points to close at 623.57. And while the period saw a sharp increase in market turnover, which reached LE923.3 million, this did not stem from a revival of investor interest but from the LE417.30 million merger between PepsiCo's Tasty Foods and Chipsy, the potato chips producer.
Big-cap telecom stocks ended down: reflecting the market drop, MobiNil closed at LE70.78, registering a LE3.36 decline amid speculation over a possible IPO by Egypt's other mobile operator, Click GSM. Orascom Telecom's (OT) shares also fell, dropping LE3 to close at LE40.21. It was not all bad news for OT though: the regional telecom company received a boost with the Algerian government's announcement of plans to offer GSM cellular network licences by May 2001. OT's management believes that a successful bid for the licence will further consolidate its regional network.
Media Production City had a reasonable week, recording a 74 per cent increase in net profits, up from LE31.01 million to LE54.25 million. That the increase was based primarily on a rise in interest income, rather than operational income, tempered the enthusiasm of most analysts, however.
Rumours that Kuwaiti investors are currently negotiating to acquire the Egyptian American Bank (EAB) saw its shares end at LE33.04, LE2.20 higher than at the week's start.
Meanwhile, the National Société Générale Bank, had some news of its own. Shareholder approval of the bank's proposed 1:2.75 stock dividend increased the bank's issued capital from LE220 to LE300 million. The bank's 13 February general assembly meeting also approved a LE1 per share cash dividend to be distributed on 11 March, 2001. The bank has attracted a great deal of attention recently by being the first to offer mobile banking services in Egypt. Yet still NSGB stocks fell by six per cent during the week to end at LE32.03.
Neither did the cement sector fare well last week. Suez Cement's announcement that it will convene an extraordinary general meeting on 24 February to win approval for plans to increase its capital by a maximum of 25 per cent via a strategic investor failed to buck the market's downward trend, and its shares ended the week at LE36.33.
The week also saw a test run of the Bourse's new electronic trading floor. The new trading system was originally planned to be operational in early 2000. Delays in upgrading the necessary infrastructure, though, have consistently delayed its launch.
The week also saw Egypt choose both Morgan Stanley and Merrill Lynch as consultants and underwriters of its new sovereign eurobond issue. The two investment banks will advise the Egyptian government on the value and timing of the offering. Though not yet fixed, the value of the offering is expected to be in the neighbourhood of $500 million.
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