26 April - 2 May 2001
Issue No.531
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Al-Ahram Weekly On-line 26 April - 2 May 2001 Issue No.531 |
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Hopes stirred for recovery
Although big caps were pushed to the red by a short trading week, good news from abroad reinvigorated the market at week's end. Sherine Abdel-Razek reports
A three-day trading week due to Easter celebrations resulted in a relatively thin volume of market transactions for the week ending 19 April.
Overall market turnover came to LE201.4 million, compared to LE572 million for the previous week, which had witnessed a short-lived revival. The Capital Market Authority index lost 6.3 points to end at 603.
The market slowed down at the beginning of the week amid concerns over regional unrest, but was rejuvenated at week's end. Egypt's shares rallied on Thursday as global markets recovered following the US Federal Reserve Bank's fourth rate cut this year and the easing of Middle East tension following US diplomatic intervention.
Analysts believe that the Federal Reserve move might increase investments channelled to Egypt. Foreigners were net buyers during the week -- their buying orders representing 38 per cent of overall transactions, compared to 26 per cent of selling transactions.
Local telecom blue chips rebounded at the end of the week after a powerful rise of their international peers on New York's technology-laden NASDAQ.
This revival, however, failed to offset the losses shouldered by the market big caps. The Egyptian Company for Mobile Services' (MobiNil) shares lost LE2.79 to close at LE61.78. Orascom Telecom (OT) ended at LE29.94, compared to LE31.12 at the beginning of the week.
OT grabbed the market's attention for having posted a slight decline in net profit for 2000 after a year of aggressive expansion in the Middle East and Africa. The regional phone operator's net profit dropped to LE37.34 million from LE38 million in the previous year, despite a surge of its total revenues to LE2.17 billion from LE1.05 billion at the end of 1999. Analysts point out that the growth in revenues was eroded by start-up costs of new operations.
After establishing eight new mobile networks in the region last year, Orascom Telecom has become the region's leading telecom operator. In 2001, OT has so far won licenses for mobile networks in Yemen, Syria and Niger, bringing the total number of MobiNil networks to 18, up from two at the end of 1999. For the rest of this year, OT, which owns 31.3 per cent of MobiNil, said it plans to expand its subscriber base and continue its revenue growth while focusing on securing its market position in each country.
Another company whose shares have gone down was Suez Cement, ending in the red at LE31.95. The company has declared a postponement of the deadline for receiving bids for its 15.8 per cent capital increase till 7 June, after receiving only one bid before the previous deadline of 9 April 2001 and a request from another bidder to extend the deadline for two more months.
The local cigarette producer Eastern Tobacco Company was a news-maker this week. It reported a net profit of LE215.1 million for the first nine months of FY 2000/2001, up from LE200.2 million for the same period last year. Revenues for the nine-month period have increased by 9.2 per cent over the previous year's figure, reaching LE1.588 billion.
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