Market report

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In the week ending 12 April, the CASE30 ended on a positive note, gaining 1.8 per cent to close at 7411 points -- its highest level ever in 14 months. This is 6.3 per cent higher than its level at the beginning of the year. The overall turnover of the market came at LE3.2 billion in only three trading days, as the market was closed on Sunday and Monday to celebrate Easter.

Another package of good economic news was released throughout the week to lift the market's spirits. Egypt's foreign currency reserves soared to reach $26.31 billion in March 2007, up from $22.54 billion in March 2006. Moreover, unemployment figures dropped from 11.8 per cent in 1998 to 8.3 per cent in 2006.

One of the country's main hard currency sources, the tourism sector, is expected to generate up to $9 billion in 2007 -- compared to $7.6 billion in 2006, according to the minister of tourism.

TELECOM EGYPT, the fixed line monopoly, is organising a roadshow for a number of its officials to market its shares in European markets beginning in London. The company aims at increasing the share of institutional investors in its 20 per cent free floated stake; currently individual investors hold almost 45 per cent of the free floated chunk.

Meanwhile, Middle East Rating and Investors' Service (MERIS) maintained its rating of "AA" with a "stable" outlook for Telecom Egypt and its bond issues. MERIS, which is affiliated to Moody's, said that the rating implies strong credit worthiness and a low likelihood of credit default, while the stable outlook assumes that the company's financial and business profile is sustainable in the medium term.

ORASCOM TELECOM HOLDING (OTH) applied its 1:5 stock splits on its shares to end the week at LE81.75 per share. The split did not include the company's Global Depository Receipts (GDRs). Following the split, there will be five local shares for every GDR. The split increases the number of shares to 1.1 billion from 220 million and reduces their par value to LE1 per share.

MOBINIL is soon to acquire a seven-year syndicated loan worth LE2.3 billion, which is the largest the company has received over the last two years. The loan -- offered by Banque Misr (National Bank of Egypt) and Commercial International Bank (CIB) -- will be used to cover the company's short- term obligations that might include applying for a third generation licence.

NATIONAL BANK FOR DEVELOPMENT (NBD)'s shareholders of a 52.6 per cent stake approved the offer of a UAE-based consortium to buy 100 per cent of the bank. This does not include the 17.86 per cent owned by the state, although there is a strong possibility that the government will accept the bid.

The consortium, including Abu Dhabi Islamic Bank and Emirates International Investment Company Consortium, offered LE11 per share for all the shares of the bank in a deal worth LE310 million. The offer was the sole bid made before the deadline. The Saudi National Commercial Bank and the Egyptian Commercial International Bank (CIB) declined submitting any financial offers despite the fact that they had shown interest and undertaken a due diligence study for NBD.

The offer came as a shock to the market, where the shares of the bank were traded at LE37 one day before the offer was submitted. However, analysts believe that the offered price is fair in light of the heavy non- performing loans portfolio.

SODIC, the real estate magnate, is in negotiations with the Lebanese developer Solidere to sign two contracts for the development of SODIC's upcoming projects in Sheikh Zayed City (covering 1.2 million square metres) and in New Cairo City (an area of 0.9 million square metres).

ORASCOM CONSTRUCTION INDUSTRIES (OCI), the regional construction giant, signed an LE700 million contract on civil and construction activities for a power plant project in Tibeen, south of Cairo. OCI grasped the contract after fierce competition with a number of construction heavyweights such as Hassan Allam and Petrojet. OCI's bid came the lowest, while Hassan Allam's amounted to LE900 million and Petrojet's LE825 million.

The plant will start operations in 2009 and has investments of LE4.3 billion. This is OCI's second contract with the Holding Company for Electricity after its Talkha power station.

Compiled by Sherine Abdel-Razek