2 - 8 August 2001
Issue No.545
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Al-Ahram Weekly Online 2 - 8 August 2001 Issue No.545 |
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Market's seven-year itch
Shares traded on the Egyptian stock exchange again fail to return from the depths to which they plunged last week. Niveen Wahish reports
Market observers have lost count of the number of times the market has dipped to its seven-year low level in the last two weeks. The EFG-Hermes financial index, which includes the shares of the market's 22 big caps, ended the week on Thursday at 5,509.17 points, down from the previous week's 5,547.10, having dropped to another record seven-year low. This is a far cry from the index's all-time high of 16,448.52, which it hit in 1997.
In the meantime, the Capital Market Authority's (CMA) all-share index also fell by 0.04 points to close at 590.48 points.
The overall value of transactions for the week ending 26 July came to only LE239 million -- even lower than the previous week's LE329.3 million. In total, 131 companies traded shares. Of these 45 rose in value, 57 fell while 29 remained stable.
Among the most active shares traded, value-wise, came the Egyptian Company for Mobile Services (MobiNil) which exchanged LE19.331 million-worth of shares. It even managed to gain LE1.03 to close at LE56.96 on Thursday. Furthermore, according to Reuters news agency, ING Barings said on Tuesday it had upgraded its rating on MobiNil to "strong buy" from "buy."
Another company which fared well and swam against the current last week was the Egyptian American Bank (EAB). Its stock gained more value than any other during the week, closing at LE50.99, up from LE42.64, its opening price on Sunday. The increase comes amid rumours that the Central Bank of Egypt is about to announce its approval of the sale of the bank.
Major shareholders in the American Express Bank and the state-owned Bank of Alexandria had said in May that they planned to sell up to 100 per cent of their holdings in EAB. Standard Chartered and Citibank, part of Citigroup are believed to be the strongest candidates.
But again, EAB was an exception. Orascom Telecom, which is a 31 per cent shareholder in MobiNil, closed on Thursday at LE17.9, down LE1.1 from its opening price of LE19.01. OT has recently witnessed the value of its shares fall the maximum five per cent each day.
OT's success in acquiring the licence to operate Algeria's second GSM mobile network with an offer of $737 million, did not have a positive effect on the company's share value. Moreover, the lack of clarity on how the company will mobilise funding for the deal, did not help.
Another loser was the Media Production City Company whose shares fell again to close at LE8.21. The company's original subscription price was LE10.
Suez Cement shares were steady with a minor drop of LE0.07 to close at LE34.25, despite the fact that the company announced its first quarter results which came lower than those of the same period last year. Suez Cement registered net profits of LE35 million compared to LE42.7 million the year before. Its sales reached LE161.85 million compared to LE141.31 million in 2000.
The Suez Cement announcement reflected negatively on the shares of the cement and contracting sector. Orascom Construction Industries closed on Thursday at LE30.44, down LE0.09 from the week before.
Another loser was the Commercial International Bank (CIB). Its shares lost LE0.17 to close at LE32.81. This is attributed to a feared drop in profits which are expected to be announced soon.
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