Recouped stumble

A short-lived decline which immediately followed London's explosions was reversed on the week's early transactions. Sherine Abdel-Razek reports

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As news of the explosions in London spread, positive sentiments throughout the market last week quickly deteriorated.

Investors expected massive sell offs to push the market towards the same downward path as that of the international market. However, the ramifications of the attack had a minimal effect on the local market, Sunday's activity was both positive and ran smoothly.

The market's main index, CASE30, recorded its highest ever recorded level of 5000 points during the week due to upbeat bull market activity. EFG hit new highs and helped buoy the market. The week's total turnover tallied LE2.40 billion. The week's turnover for the local bond market totalled LE279.4 million, significantly down from LE1.04 billion the week before, with the bulk of trading contributed by primary dealers.

SIDPEC's honeymoon seems to be ending as the stock shouldered a 5.89 per cent decline during the week to close at LE97.5. However, it was still ranked second among the most active stocks throughout the week with LE 506.7 million worth of shares.

The financial services group, EFG-Hermes Holding hit an all time high shooting up by 15.25 per cent throughout the week to close at LE38.91 and posted yet another record level of LE40 on Sunday.

Eastern Tobacco Company (ETC) secured the largest slice of transactions. With the ETC's parent company, the Holding Company for Chemical Industries selling 13 per cent of its holdings in ETC through a private placement during the week, LE661 million worth of the latter's shares changed hands. The deal lowered the HC's stake in ETC to 53 per cent, while increasing the free float to 37 per cent subsequently boosting the stock market's liquidity.

The telecom sector kept a relatively low profile. Orascom Telecom -- OT ended the week down at LE589.95. OT has signed agreements to acquire the remaining 37 per cent equity stakes in its Iraqi operation, "Iraqna". Prime securities says that through the transaction OT shall own, indirectly, 100 per cent of Iraqna, opening doors for greater flexibility in participating in the upcoming licence granting process. It added that the transaction will facilitate the boosting of OT's proportionate subscribers and profits by almost 2.4 per cent and 5.7 per cent respectively.

OCI continued with its healthy performance gaining 6.27 points throughout the week to close at LE174.89. OCI announced that its wholly owned Algerian subsidiary, ACC, has launched its second cement production line in M'sila, Algeria, with a total annual production capacity of 2.5 million tonnes. The construction of this line was undertaken at a world record pace of 18 months and at an investment cost of $192 million.

The banking sector witnessed several developments as the Egyptian American Bank EAB merged with American Express's operations in Egypt. As a result, EAB's branch network reached 36 branches.

The Greek Piraeus bank raised its stake in the Egyptian Commercial Bank to 79.7 per cent. It should be noted that the bank, which is Greek's fifth largest bank, paid 19 million euros last month to buy 69.3 per cent of ECB. The latter invited its shareholders to subscribe to its LE350 million capital increase distributed amongst 22.5 million shares at a par value of LE15.5 per share.

In other news, the fierce battle on the Egyptian Fertilisers Company came to an end. The consortium led by the local Citadel Capital Company won with its $501 a share bid. The bid includes 100 per cent of EFC with a total value of $739 million. The amount paid in capital stands at $147.5 million distributed over 1.475 million shares with a par value $100/share.

Other privatisation related news concerns Bank of Alexandria. The Ministry of Investment announced that Citi Group has been awarded the right to act as the international underwriter for the privatisation of the bank which is the smallest public sector bank.