Market report

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The local bourse kept its fluctuating performance while dominated by bears on Sunday and Monday. Local investors remained net sellers, pushing the CASE30 to close to the 5000 level. This is yet another low in the market's spiralling downslide which started early last February. The set-back witnessed by Gulf markets in the previous week threw its shadows on local stocks' performance with foreigners coming in as net sellers.

Analysts agree that while the market remains undervalued with potential for growth, no one can predict when it will reverse its direction and go up again.

In a step aimed at adjusting market forces, the Capital Market Authority (CMA) has announced new regulations to increase transparency and disclosure. The regulations are related to the buying of treasury stocks. Companies which plan to buy treasury stocks should notify the CMA in accordance with a new format determined by the CMA. The new form will include the date as well as the pricing of a deal. After the prescribed period ends, CASE must disclose the amount bought, as well as the average price of the executed transaction.

ORASCOM TELECOM HOLDING (OTH): The Algerian arm of the company, Orascom Algeria (OA), has secured a $307 million loan with 5 years maturity. The loan was arranged by Calyon and Citibank and subscribed to by Algerian and international banks.

OA will use a portion of the loan to repay a part of its debts in euros in order to limit its foreign exchange fluctuations risk. The remaining part will be used to fund the company's expansion plans. Part of the loan, equivalent to $103 million, is denominated in Algerian Dinar. The Algerian Dinar is comparatively more stable against the dollar than against the euro.

OA operates the Djezzy network through which it holds a 60 per cent of the local market share in Algeria. Other players in the Algerian mobile market include the Kuwaiti National company and a state-owned Algerian company.

On another front OTH's chairman and founder Naguib Sawiris revealed plans to establish a bank with a capital of $100 million for the funding of micro and small-scale enterprises. Sawiris plans to hold a 60% stake in the bank, while the International Finance Corporation (IFC) and the European Investment Bank (EIB) will be the other stakeholders. The CBE has yet to issue a license for the new bank.

Apart from its core business of telecommunications, the Sawiris business empire has recently seen other expansions. OT Chairman Naguib Sawiris is currently negotiating to buy Prime securities, one of Egypt's leading investment banks. He owns a daily newspaper and is also in negotiations to launch a satellite TV channel.

ORASCOM CONSTRUCTION INDUSTRIES (OCI): the regional construction conglomerate is waiting for approval by the Algerian authorities in order to construct its second cement plant in Algeria. OCI is injecting some $200 million worth of investments in the new plant which will be set up near the town of Mascara, 360km west of the capital Algiers. OCI already operates a cement plant in Algeria whose production capacity is 4.0 million tons annually.

OCI listed a capital increase of 11 million shares this week. They dived to end 4.8 per cent lower, at LE187.

ALEXANDRIA COMMERCIAL AND MARITIME BANK (ACMB): The Central Bank of Egypt (CBE) initially approved the United National Bank of Emirates' offer to acquire 100 per cent of ACMB's shares. Price Waterhouse Coopers is the buyer's adviser and is close to finishing its valuation of ACMB's assets and liabilities.

ACMB was established in 1981 by several state-owned maritime companies. It is one of a handful of Egyptian banks that failed to increase their capital, in compliance with the CBE's LE500 million minimum capital rule.

The United National Bank of Emirates has expressed its intention to buy several Egyptian banks, and has asked for more information on the Arab Investment Bank. ACMB's shares reacted positively to the news, gaining 21 per cent during the week to end at LE9.67.

SUEZ CEMENT: Egypt's largest cement producer is expanding its investments in cement- related industries. The company signed a preliminary contract to acquire a 52 per cent stake in the capital of two local producers of ready-mixed concrete, for LE78 million. The two companies have a combined market share of 30 per cent. Suez Cement has a total annual capacity of 7.8 million tons, and is 39 per cent owned by the French Ciments Francais.

Compiled by Sherine Abdel-Razek