With Gulf investors cashing in their holdings of local shares in the face of a general slowdown in Gulf capital markets, there was a marginal decline of 1.5 per cent in the CASE30 through the week ending 18 January.
A counter local buying spree limited the losses, but the CASE30 retreated below the 7000 points level to end the week at 6961 points. The value of transactions came as high as LE5 billion with non-Arab traders doing most of the buying.
ORASCOM CONSTRUCTION INDUSTRIES (OCI) has won a number of bids to construct the first phase of Egypt's third underground metro line covering over 4.3 km. The project includes five underground stations, a high voltage station and an operations and maintenance station. The Egyptian Ministry of Transportation announced various award packages at a total value of some LE1.3 billion and 418 million Euros, at a total cost of around LE4.4 billion.
OCI did not win the bids on its own, but as part of three consortia which won three awards for the civil works, electro- mechanical and track works packages. OCI's stake in the bids amounts to a little over LE1 billion, including an 18 per cent stake in the civil works worth LE1.8 billion; a LE130 million share in electrical and mechanical works worth LE801.4 million; and a 50 per cent share of LE111 million for rail works. OCI will also supply ready-made concrete for the project worth LE210 million.
Currently, OCI is engaged in the execution of railway projects in Algeria and Saudi Arabia, with a combined value approaching $200 million.
ORASCOM TELECOM HOLDING (OTH) shares reached an unprecedented high during early week transactions by touching the LE500 threshold. Moreover, the subscriber base of Tunisiana, the Tunisian subsidiary of OTH, exceeded three million subscribers. By September, 2006, Tunisiana had a market share 45.6 per cent while its sole competitor, Tunicell (owned by Tunisie Telecom) covered the rest of the market.
Furthermore, Vodafone Group and Reliance Communication are both considering buying Hutchison Whampoa's 49.8 per cent stake in Hutchison Telecommunication International Limited (HTIL), which is 19 per cent owned by OTH. The latter has the right to block the deal in case the terms were not in its favour.
In December, 2005, OTH acquired 19.3 of HTIL from Hutchison Whampoa for $1.3 billion in a deal prohibiting either party from selling its stake for a two-year lock up period. It also gives each party rights of first refusal in case of a sale after the lock up period.
HTIL is engaged in cellular and related businesses in India, Hong Kong, Israel, Thailand, Sri Lanka, and Ghana. Moreover, it won a license to start up Vietnam's sixth mobile operation. With a penetration rate of 10.9 per cent and a huge population of 81 million, the Vietnamese market represents an opportunity for growth. However, HTIL's main attraction is its 67 per cent Indian- owned subsidiary Hutch Essar. Hutch Essar has 20.4 million subscribers, representing 76.9 per cent of HTIL's total subscribers as of 30 September, 2006.
HTIL is traded on the Hong Kong Stock Exchange at a price of HKD18.8, which is 70.9 per cent higher than the OTH acquisition price of HKD11.0.
DELTA FOR SUGAR is negotiating with the Zayed Al-Nahyan clan, the ruling family in the UAE, to purchase 300 feddans owned by Al-Sharqiya governorate in order to construct a new sugar production line at a cost of LE750 million. The company, 78 per cent owned by the government, will finance the deal through LE400 million in bank loans. The remaining LE350 million will come from the company's retained earnings of the last two years.
The Ministry of Investment had announced its intention to sell a 25 per cent stake in Delta for Sugar, but no date has yet been set for the offering.
ETISALAT MISR, the company operating Egypt's third mobile license, signed a contract with a consortium of six local and foreign banks to provide it with a LE1.5 billion loan to finance its current production phase. The consortium includes the National Bank of Egypt, Commercial International Bank (CIB), Arab Bank, National Société Générale Bank, Crédit Agricole and The National Bank of Abu Dhabi. Operations should begin by the end of February using 3G technology.