Market report

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The jumps and record gains that the bourse witnessed during the first couple of weeks in October paved the way for a correction movement that prevailed at the last trading sessions of the week ending on 19 November. While the CASE30 index hit its highest ever level of 9,055 points on Wednesday it edged down during Thursday and closed at 8,964 points, 0.1 per cent lower than its level on the end of the previous week.

However the only three-day trading week -- Sunday and Monday were off to celebrate the Lesser Barium -- saw LE5.1 billion worth of shares changing hands amid a euphoric sentiment caused by the release of the UNCTAD report ranking Egypt first in Africa as an investment attraction. Egypt attracted $11 billion in FDIs during 2006/ 2007 and is expected to attract up to $15 billion next year.

Other than the FDI figures, some positive economic indicators released through the week have also given the market a pat on the back. Revenues from the Suez Canal recorded $403 million in September up from $332.3 million in the same month last year. Moreover, the Central Bank of Egypt figures for the third quarter of 2007 showed that unemployment levels decreased by three per cent from the first quarter of 2007 to reach 9.3 per cent. The number of people employed rose to 20.4 million workers and productivity increased to LE31,355 per capita pushing domestic production up by LE100 billion to reach LE617.7 billion.

News from inside the CASE administration includes a new classification system according to which the listed companies will be classified under 17 sectors rather than 22. Also, the Capital Market Authority (CMA), the CASE supervisory body, has set new financial standards for brokerage companies as means to protect investors.

EGYPTIAN COMPANY FOR MOBILE SERVICES (MobiNil): Egypt's leading mobile network operator signed an agreement with the National Telecommunication Regulatory Authority (NTRA) allowing the company to activate the Third Generation service (3G). The company is paying LE3.34 billion in addition to two per cent of its annual revenues from the service to NTRA in return of the 15-year long licence. MobiNil will pay the value of the 3G licence over four instalments, the first of which is due in April 2008. After making an advance payment this month, MobiNil will start providing the 3G services in 4-5 months.

TELECOM EGYPT (TE): Egypt's sole fixed line services provider is soon to lose its monopoly of the international call traffic. NTRA announced the terms and conditions for applying for the international gateway licence, including the three mobile operators as viable contenders. When acquiring the licence, mobile operators will enable the nation's three mobile network operators to make direct international calls.

In another development, TE announced a promotional plan through the offering of a 70 per cent discount on installation fees, which is expected to add to the company's network 300,000 subscribers by the end of 2007.

ORASCOM TELECOM HOLDING (OTH): The company bought back 1.39 million GDRs equivalent to 6.93 million local shares. This comes as part of the previously revealed plan of OTH to buy up to five million GDRs (25 million local shares) over a one-year period. The company currently owns 11.61 million GDRs and 3.86 million local shares.

ORASCOM CONSTRUCTION INDUSTRIES (OCI): The company won a bid to build and supply the components of Egypt's first electricity generation plant using the solar power at Al-Kuraymat, Giza. The overall investment in the project is worth LE1.5 billion with the international Environmental Cooperation participating in it with a 450 million grant. Other investors include the Japan International Cooperation Agency (JICA) and the National Bank of Egypt. The project is expected to start working with full force by 2010.

TALAAT MUSTAFA GROUP HOLDING (TMG): The group's next Extraordinary General Assembly will discuss the fair value for the company based on the valuation of an independent financial advisor. Also on the agenda will be the plan to increase the authorised capital to LE30 billion and delegating the BOD to decide on increasing the paid in capital through public or private placement. The shareholders attending the meeting have to approve a condition preventing existing owners of shares from trading their shares during the subscription period and for the following six months after the closing of the subscription.

Compiled by Sherine Abdel-Razek