25 - 31 October 2001
Issue No.557
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Al-Ahram Weekly Online 25 - 31 October 2001 Issue No.557 |
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In a better mood
A series of buying offers jolted the capital market out of its wait-and-see mood. Sherine Abdel-Razek reports
A sudden interest in buying stakes in a handful of listed companies energised the market during the week ending 18 October, pushing its all-share Capital Market Authority index up by eight points to reach 616.77. The value of transactions was also relatively high, totalling LE474.8 million with bond transactions accounting for about half of this figure.
The British glass maker Pilkington offered to buy 90 per cent of the private Egyptian Glass (EG) in a deal worth up to LE142 million. The bourse said Pilkington wanted to buy 1,350,000 shares in the company at a price of LE105 per share. EG shares ended the trading week at LE92.
EG's current shareholders have the option of selling their shares to Pilkington during a two-week period ending 8 November. Pilkington has the right to refrain from executing the transaction if the number of shares that it is offered is insufficient to give it ownership of at least 88 per cent of the issued capital.
EG posted a 65.6 per cent increase in its first half net profit to reach LE15.2 million compared to LE9.2 million during the corresponding period of last year.
However, EG was not the only listed company to be courted by a foreign investor last week. Media Production City, Misr Beni Suef Cement and the Egyptian American Bank were also approached by foreign investors.
Media Production City said that some investors had expressed interest in buying a stake in the company to obtain a seat on its board of directors. The company said that these investors preferred that their identity not be publicised. In the absence of concrete information, the rumour mill went into high gear, suggesting that an Arab investor had offered to buy two million shares, 20 per cent of the company's equity, at LE20 per share.
Shares in Media Production have been somewhat volatile since hitting a year low of LE7.06 on 1 August. The stock ended the trading week at LE14.78.
The British Standard Chartered Bank said that it restarted negotiations to buy the Egyptian American Bank (EAB) but it noted that a deal was not imminent.
The British bank, which is specialised in emerging market transactions, had in August offered to buy a majority stake in EAB, Egypt's third biggest private bank, but EAB's management rejected the bid describing it as "too low."
Misr Beni Suef Cement, which is primarily privately- owned, said it was negotiating to sell 4.5 million shares -- approximately 30 per cent of its equity. It said no deadline had been set for the sale, but the news fuelled buyer interest in the sector where more sales of government stakes are expected.
The telecom sector had a rough week amid a wave of profit-taking, mainly by foreign investors. MobiNil, the mobile phone service provider, closed the week at LE42.15. Analysts expect the share to gain strength during the coming weeks to hit somewhere in the environs of LE48. The company last week started to buy back some of its floated shares from the Cairo stock market to fund its employee stock option plan.
Other than trading figures, the fast-growing telecom sector had good news last week. Commercial International Investment (CIIC), the investment arm of the Commercial International Bank (CIB), has set up an incubator to boost Arab technology start-ups.
I-developers is Egypt's first incubator and has a fund of $12 million. The new firm is owned by CIIC and supported by Telecom Egypt and the Ministry of Communications and Information Technology.
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