Labour law passes

AFTER long years of deliberation and almost five months of discussion in parliament, the People's Assembly finally approved the Unified Labour Law on 5 April, to regulate the relationship between workers and employers in a free market economy. The law was rejected by the six deputies of the leftist Tagammu Party, while four independent MPs abstained from voting.

The minister of manpower, Ahmed El-Amawi, told parliament that the government had acted as a coordinator between workers and businessmen in drafting and discussing the law. "The government just wanted to make sure the bill is as balanced as possible. At least 70 per cent of the articles were modified, either partially or entirely, to attain this objective," he said.

The law gives employers the right to lay off workers, but also proposes, under certain conditions, the sanctioning of strike action by workers to offset this. Hussein Megawer, parliamentary leader of the ruling National Democratic Party (NDP), said, however, that the law gives workers many rights, notably one of increasing annual bonuses and holidays. "But workers must know that this law is also aimed to reflect economic developments in the sense that employers, unlike in the socialist years, should have more say in running their businesses," he added.

Eni bids for Edison assets

ENI, ITALY'S largest oil and gas group, has bid for Egyptian natural gas assets owned by the Italian energy group Edison. The assets were recently put on sale as part of Edison's plans to divest two billion euros of its global assets in 2003 in a bid to reduce debts.

Analysts, quoted by Reuters, said Edison might raise about one billion euros from the sale of 50 per cent of the Egyptian West Delta Deep Marine concession, co- owned by British gas giant BG Group. Eni was one of seven companies that has offered a bid over the last week for Edison's Egyptian gas assets.

Eni is the largest international company operating in oil and gas production in Egypt, with an overall share of 33 per cent of the market. It has been in the Egyptian market since 1953 and its activities cover exploration and production of oil, natural gas, engineering and oil field services.

In 2001, Eni, BP and the Egyptian General Petroleum Company (EGPC) signed an agreement for the development of a liquefied natural gas (LNG) plant and related marketing and sales. The plant is due to start production in 2004.

Withholding dividends

THE CENTRAL Bank of Egypt (CBE) has asked more than 15 local commercial banks not to distribute dividends for the past fiscal year and retain them instead as reserves to cover different provisions.

The CBE said that this move came in a bid to enhance the capital of these banks and support their financial positions as they currently do not have adequate provisions to cover non-performing loans. According to the draft Unified Banking Law, local banks must increase their capital to LE500 million.

The general assemblies of the 15 banks, including Al-Mohandes Bank, the International Islamic Bank and Al-Watani Development Bank have yet to act on the CBE's recommendations.

Downgrade for Al-Watany

FITCH Ratings and its Cairo based subsidiary, Nile Ratings, has downgraded Al-Watany Bank of Egypt's (AWB) national short and long-term ratings.

According to Fitch, the move reflects concern over AWB's weakening profitability, asset quality and capital adequacy trends. The private Egyptian bank saw a 67 per cent drop in its profitability in the nine months ending September 2002, compared with the corresponding period in 2001.

This decline was attributed to deteriorating asset quality and high funding costs, both of which have had a negative impact on the bank's capital adequacy levels. The rating company has also changed its outlook for the bank to "Negative" due to uncertainty over its 2002 results.

Ranked 17th among Egypt's 63 commercial banks in terms of asset value, AWB's market share of banking sector deposits and loans stand at just over one per cent.