Market report

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Investors and observers started to relax as the market appeared to be turning bullish at last. The Cairo and Alexandria most active traded stocks index CASE 30 gained five per cent during the trading week which ended on 6 April and reached 7064 points. This is 19 per cent higher than its level recorded on black Tuesday when most shares witnessed a free fall.

The week's sound performance was backed by an increased interest from foreign and especially Arab investors. This was after an overall positive sentiment influenced the Gulf region's capital market transactions, in the wake of the slowdown of the past two months. Market observers believe that Arab investors still haven't returned to the market in full force, since they are still restructuring their portfolios in order to absorb their losses incurred since late January.

Overall transactions during the week shot up to as high as LE12 billion compared to LE4.8 billion in the week before. These included LE6.4 billion worth of transactions in which Vodafone International acquired the 72 million shares previously held by Vodafone Europe in Vodafone Egypt.

ORASCOM TELECOM HOLDINGS: The regional GSM operator's recently-released fourth quarter results for 2005 are still capturing investors' attention. OTH posted LE3.9 billion net profits worth compared to LE2.021 billion in 2004.

Although the results fell short of EFG Hermes' expectations, the brokerage company commented positively on the results. " With the growing scale of OT's operations and the future completion of backbones in Algeria and Pakistan OTH's profit margins will expand," said EFG in a note released to investors. One positive development highlighted by EFG was the increase in OT's market shares in Algeria, Tunisia and Bangladesh while they stabilised in Iraq and Egypt.

EFG maintained its 'Buy' recommendation for OTH, which it described as being "one of the fastest-growing emerging market mobile players." EFG reiterated its fair value estimate of OTH's shares at LE437. OTH ended the week by 2.18 per cent higher and closed at LE 322 per share.

VODAFONE EGYPT: The mobile operator alone garnered more than 50 per cent of the market's overall transactions. Its shares surged by 4.81per cent to close at LE92.39 a share.

VE's chairman Mohamed Nosseir has announced that if Telecom Egypt bids for the market's third mobile license, Vodafone International and Alkan Group will negotiate with Telecom Egypt to acquire back its stake in VE. Telecom Egypt currently owns 61.2 million shares of Vodafone Egypt, representing 25.5 per cent of the company.

SIDI KRIR PETROCHEMICALS (SIDPEC): The company announced that it is in the process of establishing two new petrochemical projects at an overall cost of $55 million to produce chemicals for liquefied natural gas (LNG) pipelines. SIDPEC will also distribute a dividend of LE6 to its shareholders on 26 April. The company's net profit for the year 2005 was LE794.7 million representing an 8.2 per cent increase over the previous year. SIDPEC was listed on the market in the middle of 2005 when the government floated 20 per cent of its 97 per cent stake to the public through an IPO.

COMMERCIAL INTERNATIONAL BANK (CIB): Egypt's leading private bank witnessed a new change in ownership. The International Finance Corporation (IFC) acquired two per cent of CIB at $23 million. IFC bought the stake from American Ripplewood Holdings which had previously acquired the National Bank of Egypt's 18.7 stake in CIB.

CIB is planning to bid for a stake in the Bank of Alexandria which is slated for privatisation. The bank's newly-accumulated return investment fund also started its activity this week after subscription in the fund's certificates ended last week. CIB has launched a money fund that will only invest in fixed-income instruments in 2005 and is managed by the Commercial International Asset Management company.

SIXTH OF OCTOBER DEVELOPMENT & INVESTMENT COMPANY (SODIC) : The company reported its 2005 audited results in which it recorded a net profit of LE41.34 million, compared to a net comparative loss of LE38.330 in 2004. SODIC's annual report submitted to CASE authorities revealed that it sold a one million square metre plot of land worth LE131.25 million in 2005, of which LE93.7 million were included in the financial results of that year. The company also recorded sales of finished units estimated at LE154 million. SODIC was recently put under the spotlight for its having recorded a mammoth yet totally unjustified increase in price, estimated at over 7000 per cent in the 13-months period which ended in late January. Shares reached LE270 compared to LE3.3 at the end of 2004. The share ended at LE94.

ORASCOM CONSTRUCTION INDUSTRIES (OCI): The shares issued by the construction arm of the Sawiris group of companies reacted positively to the news that construction in UNICEM's cement factory in Nigeria had been halted for two days because of a labour strike. The company has been aggressively expanding, not only in new markets but in new industries as well. OCI currently owns operations in the construction, cement , fertilisers and gas industries. LE263.07 million worth of OCI shares changed hands in the week which ended with OCI's share increasing by 4.65 per cent to reach LE 246.31 a share.

Compiled by: Sherine Abdel-Razek