Market report

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While the start of the week was tough, the ending on 22 March was a happy one. In the early trading days of the week, the market was affected by negative news in the telecommunications sector, however a revival in capital markets across the world ignited enthusiasm in the local market by Wednesday and Thursday.

The three hits which the telecommunications sector's main players took were the disqualification of Orascom Telecom Holding's (OTH) bid for Saudi Arabia's third mobile licence; second came the threat by Telecom Egypt (TE) to withdraw from the Algerian Lacom; and, finally, there was an escalation of the dispute between MobiNil and the National Telecommunication Regulatory Authority (NTRA). All these developments weighed down on the sector, and the entire market along with it.

But the news at the end of the week that MobiNil is engaging in talks with the Ministry of Telecommunications to acquire a 3G licence gave the sector a pat on the back. It also coincided with a positive sentiment from regional and international markets after the US Federal Reserve decided to keep interest rates unchanged.

The overall turnover through the week came at LE6.2 billion -- the market's highest since the beginning of the year. The most actively traded stocks index CASE30 ended the week 0.7 per cent lower at 7,197 points. Compared with regional markets, the performance of the CASE was average; the Abu Dhabi stock exchange was down 0.2 per cent, Dubai lost a significant 4.2 per cent, and Saudi Arabia's Tadawul index fell by 0.5 per cent.

EGYPTIAN RESORTS CO alone cornered 11.7 per cent of the market turnover, with company shares soaring by a strong 11.3 per cent during the week. It was revealed mid-week that Egyptian Resorts will hold a general assembly meeting on 11 April to approve its 2006 fiscal year results and a proposed 2:3 stock dividend.

ORASCOM CONSTRUCTION INDUSTRIES (OCI), the leading regional construction firm, formed a joint venture with Algeria's state-owned oil and gas company Sonatrach to build a one- million-tonne-per-year ammonia and urea fertiliser plant, as well as a 0.7 million tonne ammonia plant. OCI holds a 51 per cent stake in the new company called Sorfert Algerie and Sonatrach owns the remaining 49 per cent.

The plants will be built in the industrial zone in Wahran province near the Mediterranean coast to facilitate exports. Sonatrach will supply Sorfert with natural gas for 20 years, while OCI will be the project's lead developer. According to an OCI press release, 70 per cent of the total cost will be financed through loans from Algerian and international banks.

MOBINIL's dispute with the National Telecommunication Regulatory Authority (NTRA) rages on. MobiNil's CEO Alex Shalaby hinted that NTRA is pressuring his company in order not to resort to international arbitration to settle the EDGE dispute.

NTRA said last week that MobiNil does not have the right to use new mobile lines starting with the digits 018. Shalaby noted that according to the license given to MobiNil in the late 1990s to operate Egypt's first mobile network, the company has the right to have new numbers.

On a related note, Minister of Telecommunications and Information Technology Tarek Kamel said that his ministry is currently talking with MobiNil to upgrade to a 3G license.

Compiled by Sherine Abdel-Razek