Market report

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The market is at last gaining some ground, with foreign investors regaining confidence which was reflected in their increasing buying transactions -- as net buyers in both Sunday and Monday. The week which ended 1 June saw a 7.3 per cent jump in CASE 30, to end very near to the 5500 support unit which it broke on Sunday's transactions.

The market's capitalisation increased by LE13 billion during the week, a recovery which was due to bearish performance in the market's blue chips.

Several market observers continued to blame the same-day trading mechanism for being one of the main factors that had pushed the market further down in previous weeks. However, a report submitted by CASE's head, Maged Shawqi, to Minister of Investment Mahmoud Mohieddin concluded that this could not be held accountable for the downturn. The report said that the value of transactions on shares traded by means of this technique, ever since it was implemented last October, has not exceeded one per cent of the market's overall turnover.

On a related note, Hani Sarieddin's mandate as chairman of the CMA was renewed this week until June 2007.

ALEXANDRIA MINERAL OILS Company (AMOC): 12 local and foreign companies submitted letters of intention to bid for the 50 per cent offered stake in AMOC. These include Indian, Kuwaiti and Saudi companies, in addition to the local joint-venture Citadel Capital.

As advisor to the sale, the National Bank of Egypt (NBE) is studying the offers to select the companies which will be given green light to start the due diligence process.

The offered stake could increase to include 80 per cent of the shares, including the free floated 20 per cent. Alexandria Petroleum Company plans to maintain its current 20 per cent stake. The company posted a 28.2 per cent increase in its net profits in the first nine months of fiscal year 2005/2006. Profits reached LE509.2 million. AMOC's 20 per cent IPO also attracted sizeable attention last year, in its capacity as the second oil company to be floated in the local bourse. AMOC shares closed the week at LE76, compared to its offering price of LE45 at the end of 2005.

ORASCOM CONSTRUCTION INDUSTRIES (OCI): The company's seven- year bonds are being marketed by the Arab African Bank as issue lead manager. The $287 million offering will include three tranches, of which one will be in dollars. OCI plans to use part of the receipts from the issue, to redeem its previous LE400 million bonds issue. The remaining sum will finance the company's regional expansion plans.

OCI's cement activities have expanded with an overall capacity of 21 million tonnes, which is expected to reach 33 million tonnes by the end of next year. With this, OCI will be ranked the seventh largest global cement producer. OCI's financial results were heart- warming for its investors, with a 54 per cent increase in net profits in the first quarter.

COMMERCIAL INTERNATIONAL BANK (CIB): The bank's shareholders have been invited to attend the bank's extraordinary General Assembly meeting on 26 June, in order to approve a capital increase from LE1.3 billion to LE1.95 billion. The increase will be financed by reserves through the distribution of a stock dividend of one share to each two shares owned. The GAM is to discuss the establishment of an Employee Stock Ownership Plan. The bank is a partner in one of the 11 consortia which are bidding for the third mobile license with the National Bank of Egypt, the UAE-based Ittisalat and the National Post Authority. CIB ended the week at LE55, compared to LE56.6 in the previous week.

TELECOM EGYPT was among the market's best performers during the week. This was propelled by news of an agreement between the Egyptian National Telecommunications Company, and Libyan authorities to build on- shore and off-shore cables. The company is also banking on the strong possibility of its consortia with Telecom Italy, in winning the bid for the third mobile licence.

VODAFONE EGYPT: the country's second mobile phone operator succeeded in increasing its market share to 46 per cent in 2005. It also posted a 35 per cent increase in net profits in the same year. Vodafone Egypt will convene its GA on 22 June.

ORASCOM HOTELS AND DEVELOPMENT: The company's general assembly convened last week. OHD Chairman Samih Sawiris said that an American financial group will issue its valuation for the company's real estate. OHD will also request investment banks to issue new research reports to revaluate the company.

Sawiris added that OHD has established a new tourism development company in Oman with a paid-in capital of 200 million Omani Riyals. Last week, the company had announced a plan to buy back 1.5 million of its shares as treasury stock.

Compiled by Sherine Abdel-Razek