Market report

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Cutting the trading session by 60 minutes during Ramadan did not affect the value of transactions during the week ending 20 September. In fact, the week saw buoyant activity with LE7 billion-worth of shares changing hands, and the CASE30 hitting an all time high of 8,606 points during the week which ended with the index at 8,530 points.

Foreigners returned as heavy buyers after the US mortgage market problem was resolved and the Federal Reserve moved to lower the interest rates on dollar -- stirring a positive sentiment in international markets.

As in previous weeks, news of a well-performing local economy gave the market a pat on the back.

The Ministry of Tourism announced that Arab and foreign investments in the industry soared to $7.12 billion in fiscal year 2006/2007, compared to $6.1 billion one year ago. The ministry expects to add 15,000 rooms in the coming year to meet its commitment to add this number of rooms annually for the next five years.

In what can be considered a move to widen the scope of traded commodities on the CASE, a new securitisation deal is on the way. Four consortia have submitted technical and financial bids to serve as financial advisors to the securitisation of around LE2 billion mortgage loans for four subsidiaries of the Holding Company for Construction and Urbanisation. The subsidiaries are Heliopolis Housing and Development, Maadi Housing and Development, Al-Nasr Housing and Development, and Al-Maamora Housing and Development.

NASR CITY HOUSING AND DEVELOPMENT (NCHD) posted a 39.3 per cent increase in its net profits through the fiscal year 2007, to reach LE86.2 million. Analysts attribute the improvement to a new management strategy which is more profit-oriented and better able to utilise the company's land bank. This is reflected in the company's profitability margins, noted HC Securities. Both Beltone Investment Group and Beltone Capital managed to win four seats on NCHD's board by cornering together around 28 per cent of the company in January, 2007. This figure increased to 30.3 per cent in the last eight months.

In a related development, NCHD said it will not depend on its own resources to finance a project to build low and middle income housing units in the 6th of October City. The project covers 175 feddans, although the number of units and total cost of the project have yet to be decided.

MOBINIL, Egypt's largest mobile phone network operator, is currently in talks with a number of banks to acquire a LE1 billion loan to partly finance its acquisition of a 3G licence, worth LE3.34 billion. MobiNil's first payout for the licence is LE1.3 billion; the rest will be paid in annual instalments. MobiNil is still negotiating the payment schedule with the National Telecommunication Regulatory Authority (NTRA).

The company said it will offer 3.6G services to subscribers within six months after the first payout. According to NTRA figures, mobile subscribers in Egypt reached 27 million with MobiNil alone servicing 13 million of them. Vodafone Egypt's subscriber base comes to 12 million, while the newest mobile phone operator Etisalat Egypt has two million subscribers. A study by the Ministry of Economic Development concluded that the number of mobile users will reach 32 million by 2012, with an average annual increase of around 25 per cent.

ORASCOM TELECOM HOLDING (OTH) pulled out of a bid to own Qatar's second mobile licence; seven out of the 12 short-listed companies for the licence have submitted technical bids. These include AT&T, Vodafone Group, Verizon Communications, Etisalat, BATELCO, MTC and Airtel. In addition to OTH, Jordan Telecom, Oman Telecommunication and Belgacom withdrew from the race.

OTH was established in 1998 and is currently among the world's 10 largest telecom operators in terms of subscribers. The company has three lines of business generating revenues of $4.4 billion in fiscal year 2006, and $2.5 billion in the first half of 2007. In the first half of 2007, cellular services represented 89 per cent of OTH's operating revenues, while telecommunication services represented 10.2 per cent and Internet services captured 0.8 per cent.

EXPORT DEVELOPMENT BANK OF EGYPT (EDBE) showed a better performance during fiscal year 2006/2007 to record a net profit of LE248 million, compared to a net loss of LE158 million during 2005/2006. The change of fortune stemmed from a 95.5 per cent reduction in the bank's non-performing loans (NPLs) provisions, after it booked substantial provisions in FY05/06 to achieve full coverage of its NPLs. The bank's net interest income grew by 25 per cent, despite slashing its investments in treasury bills and bonds by 60 per cent during 2006/2007 due to their low yield. The 20.8 per cent increase in the bank's loan portfolio, and thus interest income, fed the hike in net interest income.

Compiled by Sherine Abdel-Razek