Market report

By Sherine Abdel-Razek

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In the second trading week of 2007, the market witnessed a mixed performance while staying above 7000 points. The index of its most actively traded companies, CASE30, broke on the first trading days of the new year. The four-day trading week ending 9 January had a bullish start that was reversed by mid-week due to profit-taking, and followed by a slight pick up by week's end. The week which witnessed trading move back one hour, brought a handful of news related to both listed companies and the Bourse's IT infrastructure.

Cairo and Alexandria Stock Exchange (CASE) Chairman Maged Shawqi said that the exchange's board members have approved plans to change company listing rules, in addition to other changes aimed at increasing the level of disclosure. The plan was submitted to the Capital Market Authority for approval.

According to the suggested amendments, minimum capital requirement for a company to be listed would be LE100 million instead of LE20 million, while the minimum number of issued shares would increase five times from two million to 10 million. Also, listing rules for holding companies now stipulate that the founders or board members retain at least 25 per cent of a company's shares for at least two years after the IPO.

In another note OMX, a leading exchange house, signed an agreement with CASE to provide a new trading system which will enhance CASE's IT infrastructure. Meanwhile, equity turnover came at LE3.83 billion.

RAYA HOLDING: The fast growing IT company increased its stake in C3 call centre by 59.5 per cent, to become the owner of 84.5 per cent of the centre. This is Egypt's largest call centre serving over 450 agents. This brings Raya's total number of call agents to 1,600. C3 outsources services to local, European and US clients with 80 per cent of its revenues generated from international customers.

Call centres are part of the outsourced services provided by Raya's information technology unit. According to a news bulletin issued by HC Securities, the acquisition of C3 will boost Raya's outsourced services revenues, which amounted to LE30.9 million in the first nine months of 2006.

ETISALAT EGYPT: The operator of Egypt's third mobile network successfully made a telephone call using 3G technology, which is the pioneer application of the technology in Egypt. According to the third mobile license Etisalat grabbed in July for LE16.7 billion, it has the right to offer both the 2G and 3G service. Its predecessors MobiNil and Vodafone are currently in negotiations with the National Telecommunication Regulatory Authority (NTRA) to acquire their own 3G licenses.

Etisalat's network is expected to be up and running by March. Meanwhile, the company ruled out the possibility of selling a stake through the stock market at least for now, and not until it begins operation. Etisalat plans to invest LE20 billion in the market during the next three to five years with the aim of cornering a market share of 30 per cent by 2010.

ORASCOM HOTELS AND DEVELOPMENT (OHD): The hotel and property development company is targeting a new sector of clients by creating a new company to develop budget housing. The new entity, Orascom for Budget Housing (OBH), will develop low-cost housing in different parts of Egypt. According to press reports quoting OHD Chairman Nassef Sawiris, the new company will cooperate with an international company to build 50,000 units on 8.4 million square metres in the areas of 6th of October, Fayoum and Red Sea.

OBH has a paid-in capital of LE60 million and an authorised capital of LE600 million. OHD recently set up a new mortgage finance company that will finance up to 70 per cent of the price of the developed units, with loans with 20-25 years maturities.

EFG-HERMES: The company made a comeback to the five most actively traded companies list, ranking second with LE323 million-worth of its shares trading hands. EFG was outdone by SIDPEC, which was the market's bellwether, by cornering 10 per cent of the overall market turnover after announcing a share split plan.

EFG informed CASE authorities that it transferred the ownership of its 1.121 million treasury shares to its Employees Trust, according to a decision taken in its general assembly meeting in November.