Briefs

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Record revenues

SUEZ Canal revenues are expected to reach some $3 billion in 2004. The canal has benefited from increased traffic due to high oil prices over the past two years which have made it cheaper for ships to go through Suez than sail around South Africa.

Suez Canal Authority Chairman Ahmed Fadel told AP that the Canal has also benefited from the boom in global trade with China. The tonnage of ships passing through the Canal, going to, or coming from, China, grew 34 per cent in 2003, to reach nearly 53 million tonnes just under 10 per cent of the total annual tonnage of 549 million tonnes.

Only 2.1 per cent of the canals $2.6 billion in revenues for 2003 came from warships heading towards the conflict in Iraq, Fadel said.

So far this year, the canal has made $2.5 billion. In October alone, it netted a record- breaking $268 million.

The chairman said that the canal could sustain that kind of increased revenue if it widened its basin to take on bigger ships, and kept its fee structure competitive.

CASE up

THE CAIRO and Alexandria stock exchanges most active companies index (CASE30) recorded its highest ever level last week. Backed by active telecom and banking sector stocks, the CASE30 closed at 2336.4 points.

Led by Orascom Telecom (OT), the telecom sector contributed to the record performance with an increasing demand on shares. OT ended the session at LE218 in anticipation of the release of its results for the first nine months of the current fiscal year.

Expectations surrounding National Societé Generale Banks results also added to the markets positive mood, and pushed the entire banking sector forward.

Another contributor was Orascom Construction Industries (OCI), which cornered 14 per cent of overall market transactions during last weeks trading. OCIs investors were pleased with news that the company had acquired a 50 per cent stake in a Pakistani cement firm.

Launched in January 1998, the CASE comprises the markets 30 most active stocks

FEMIP experts verdict

THE DEVELOPMENT of water, sanitation and transportation services topped the agenda of some 100 experts who came together in late October for the second experts committee of the Facility for Euro- Mediterranean Investment and Partnership (FEMIP) in Amsterdam. The experts committee puts forward recommendations to FEMIPs ministerial committee, made up of the economy and finance ministers of EU and Mediterranean Partner Countries (MPCs).

The experts called for the creation of a Euro-Med Transport Network, and more private sector involvement in the management of water, sanitation and transport services.

Dutch Finance Minister Gerrit Zalm told participants that FEMIPs primary objective was developing a better business climate. The challenge is to reduce the cost of doing business through regulatory reforms that will enhance the quality of the investment climate. This can increase annual economic growth by up to two per cent.

One of the key prerequisites for sustainable growth, according to Philippe de Fontaine Vive, the European Investment Bank vice- president in charge of FEMIP, is the development and management of effective water resources. In the meantime, the financing of an expanded transport network, designed to strengthen economic, social and cultural ties between the two shores of the Mediterranean, represents a significant opportunity for cooperation between all the financial institutions active in the region, he said.

FEMIPs lending in 2003 and 2004 was around 2 billion euros, of which some 50 per cent are for the private sector. Since 1995, out of a total of 11.5 billion euros of lending to MPCs, environmental lending amounted to some 2.4 billion euros (21 per cent of lending for this period). Half of that goes to water and sanitation. Lending for transport projects, meanwhile, also totalled 2.4 billion euro.

FEMIPs next ministerial meeting is scheduled for next year in Morocco.

Mobile gains

VERY FEW of the world's mobile operators can match the earning margins realised in the Middle East and North Africa (MENA) region. According to a new Pyramid Research report entitled Middle East & North Africa Mobile Benchmarks, profit margins for the region's mobile operators average nearly 60 per cent, with some reaching upwards of 80 per cent.

According to Pyramid Research analyst Jonas Lindblad, by 2008, there will be 100 million mobile subscribers in the region, up from the current 45 million, with five mobile operators exceeding $1 billion in revenue. Several operators in the MENA region have leveraged their market exclusivity by minimising costs through limited marketing and network maintenance.

However, Lindblad argues, "over the long term, competition will push margins towards the global average, as monopoly operators will have limited opportunity to keep their cost base at its currently low level."

Lindblad points out that the greatest "cost savings are realised through integrated fixed/ mobile operations," as almost all of MENA's top performers in terms of margins are integrated mobile/fixed incumbents.

The currently high profit margins imply huge room for further growth in terms of subscribers and revenue; in spite of the large number of licences recently issued, there are also more in the pipeline. "Several second- and third-licence operators will rise to the top of the region's mobile rankings," Lindblad said.