The beginning of Ramadan coincided with a profit-taking spree in the capital market. Sherine Abdel-Razek
The market reversed its buoyant performance and witnessed benign activity during the week which was holiday shortened to celebrate 6 October, and one with shorter sessions, according to Ramadan trading hours.
The market turnover during the week totalled LE1,657 billion with LE208.899 million in bond trading.
The spiral increase in share prices and excessive buying activity during the previous weeks were halted last week with investors cashing in their holdings of equities to realise capital profits.
After shooting in its first week of trading, AMOC share price declined 8.02 per cent to end at LE83.8. However, the share was the market's highest traded stock with LE257 million worth of its stocks changing hands.
Another active stock but also ending in the red was Sidi Krir Petrochemicals (SIDPEC) which dropped 5.58 per cent to close at LE116.23. Sixty per cent of the company is expected to be offered during the first quarter of 2006.
Telecommunications giant Orascom Telecom had a busy week with its turnover alone amounting to LE164.65 million, yet the stock dipped 1.28 per cent to close at LE555.93. OT is in fierce competition with four global companies on the acquisition of Telsim, the second mobile operator in Turkey, which has a subscriber base of eight million and an estimated market value of $2.8 billion.
The tourism sector's most prominent stock, Orascom Hotel & Development (OHD), made a significant 3.5 per cent gain to close at LE50.4 following news about a new project in Yemen. OHD will develop the Yemeni Kamaran island of the Red Sea into a tourist free zone area. The plan includes the construction of both an airport and a port for yachts in addition to a number of hotels and resorts. OHD expects the project to take as long as 15 years. The first phase could cost as much as $250 million.
The banking sector is still in the limelight with news of acquisitions and the overhaul plan. The latest development is the Lebanese Bloom Bank's acquisition of 33.26 per cent of Banque Misr's stake in Misr Romanian Bank. Bloom Bank has also placed a tender offer to acquire the remaining 67 per cent stake of other shareholders at LE11.82.
The construction sector's rising star, Nasr City Housing & Development concluded a $62 million deal with the UAE-based Emaar Properties. According to the deal, NCHD will develop housing and tourist projects on four million square metres owned by Emaar in Muqattam Heights. However, shares of the company lost ground to end at LE80.1 amid selling pressure. Investors sold NCHD shares after it doubled in price the previous week. The company is slated for privatisation within the next few weeks.
Macroeconomic indicators announced this week were encouraging. Egypt's foreign reserves reached $20.7 billion in August, 6.2 per cent higher than August of last year. Egypt's foreign reserves hovered around $20 billion in 1997 but followed a slide due to a decline in foreign currency revenues and an ailing foreign exchange regime. The tailspin came to a halt in the second half of 2004.
Revenues from the Suez Canal came in at $869 million during the first quarter of the current fiscal year, representing a $7.9 million increase over the comparable period last year.
On another positive note and according to Prime Securities weekly market report, the British Middle East for Credit Rating & Investors Services Company, MERIS, said Egypt was expected to witness a 12 per cent increase in salaries in 2006. Inflation is expected to decline to 4.9 per cent.
A handful of privatisation offers were announced during the week, the most significant of which came from the pharmaceutical sector, a sector not generally regarded as a target for privatisation.
The Holding Company for Pharmaceuticals will offer 40 per cent of Chemical Development Industries -- CID. The offered stake will be divided as follows: 35 per cent for the public and five per cent for the company's workers' union. Minister of Investment Mahmoud Moheiddin announced that sales revenues expected from the divestment of state companies and assets during fiscal year 2006 are LE10 billion.